1989 Legislative Session: 3rd Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MAY 15, 1989

Afternoon Sitting

[ Page

6759 ]

CONTENTS

Routine Proceedings

Workers Compensation Amendment Act, 1989 (Bill 27). Hon. L. Hanson

Introduction and first reading –– 6759

The British Columbia Recycling Act (Bill M212). Mr. Harcourt

Introduction and first reading –– 6759

Oral Questions

Joe Borowski's incitement to blockade abortion clinic. Ms. Marzari –– 6760

Toxic fuel imports. Mr. Cashore –– 6760

Doman case. Mr. Sihota –– 6761

Chinese medicinal wines. Mrs. Gran –– 6761

Legal action against IWA officials. Mr. Sihota –– 6761

Condoms for prisoners. Mr. Perry –– 6762

Motions on Notice

Motion 42. Hon. Mr. Parker –– 6762

Trade Development Corporation Act (Bill 3). Committee stage.

(Hon. J. Jansen) –– 6763

Mr. Gabelmann

Mr. Williams

Mr. Clark

Hon. Mr. Vander Zalm

Mr. Miller

Mr. Kempf

International Trusts Act (Bill 18). Second reading

Hon. S.D. Smith –– 6781

Mr. Sihota –– 6782

Hon. S.D. Smith –– 6782

Statutes Repeal Act, 1989 (Bill 2). Committee stage. (Hon. S.D. Smith) ––

Third reading

Tabling Documents –– 6782

Budget Measures Implementation Act, 1989 (Bill 5). Second reading

Hon. Mr. Couvelier –– 6782

Mr. Clark –– 6783

Hon. Mr. Couvelier –– 6783

Committee of Supply: Ministry of Transportation and Highways estimates.

(Hon. Mr. Vant)

On vote 72: minister's office –– 6783

Mr. Lovick

Mr. Kempf

MONDAY, MAY 15, 1989

The House met at 2:06 p.m.

Prayers.

HON. MR. STRACHAN :

Visiting us in the precincts today, from the city with the lowest

unemployment rate in the central interior and the highest per capita

salary in the province, is the mayor of Prince George, John Backhouse.

Would you please welcome him.

HON. MR. REID :

Visiting us today in the House are some of the people who help pay some

of the benefits into Prince George and other areas of the province.

Would the House make welcome: Allen Price, member of the board of the

B.C. Lottery Corporation; Guy Simonis, president of the B.C. Lottery

Corporation; Vic Poleschuk, vice-president of the B.C. Lottery

Corporation, from Kamloops; and Michelle McBride, executive director of

marketing for the B.C. Lottery Corporation. Would the House please make

these people welcome.

MR. GABELMANN : I have a couple

of introductions today. First of all, there is a group of students ––

24 in all — from the North Island Secondary School in Port McNeill,

here as part of the Fletcher Challenge tour. They are accompanied by

teachers Nancy Bain, Rod Bain, Kathy Parker and Pat Parker, together

with Fletcher Challenge reps Hans Grenander and Caroline Grenander. I

trust I've pronounced those names correctly. I would ask the House to

make these students and other visitors welcome.

Mr.

Speaker, also in the House today is a constituent of yours and the

mother of my legislative assistant, Mrs. Dulcie McCallum. Would the

House please make her welcome.

HON. J. JANSEN : In

the House today and visiting Victoria from the great constituency of

Chilliwack are Jane and Casey Langbroek. Would you please make them

welcome.

MR. PELTON : Hon. members, today it's a

great honour and privilege for me to introduce to this House nine very

talented musicians. These gentlemen are purveyors, in the very best

sense, of Dixieland music, and those of you who have had the privilege

of attending Victoria's great jazz festival will know what I'm talking

about. But there's one thing just a little bit different about these

gentlemen. They are here as living proof that music has no bounds of

any kind at all. These gentlemen are all from Russia — from Leningrad.

Although I never studied Russian, I would like to read their names into the

record. They are Oleg Kuvaitsev, Alexander Usyskin, David Goloshokin, Vladimir

Voronin, Anatoli Chimiris, Boris Ershoz, Constantin Dyubenko, Alexander Skrypnik

and Yuri Miroshnichenko. They are accompanied by Hermann Nieweler and their

interpreter, Steve Boulay. Would the House make them really welcome, please.

MR. ROSE :

On behalf of the opposition I too would like to welcome the visiting

musicians from Leningrad, and I would like to tell the first member for

Dewdney (Mr. Pelton) that it didn't sound like a group of musicians at

all he was introducing; it sounded more like a hockey team. Anyway, if

they play music as well as they play hockey over there, then I'm sure

we're in for a great treat, I'm hoping to come over there to at least

listen to one chorus of "Midnight in Moscow."

MR. LOENEN :

It's always a delight to welcome constituents. On behalf of the Premier

and myself, would the House please welcome Dolena Kirkwood.

MR. ROGERS : On behalf of our visitors from the Soviet Union, dobry vyechr .

Introduction of Bills

WORKERS COMPENSATION

AMENDMENT ACT, 1989

Hon. L. Hanson presented a message from His Honour the Lieutenant-Governor:

a bill intituled Workers Compensation Amendment Act, 1989.

HON. L. HANSON :

Mr. Speaker, this bill reflects what can be accomplished when labour,

management and government work together towards a common goal.

The

Advisory Committee on the Structures of the Workers' Compensation

System was able to reach unanimous agreement on their recommendations.

I would like to thank publicly the participants. The chairman was

Donald Munroe, QC, and other members were Gordon Cameron, Oksana Exell,

Ken Georgetti, Robert Hallbauer, Claude Heywood, Bernice Kirk, James

Matkin, Jim Nielsen, Stan Shewaga, Glen Smale, David Weller and Len

Werden.

The proposals of the Munro report have been

accepted by government. Both employers and labour will be given a

greater role in the development of policies, programs and procedures. A

new independent 13-member board of governors comprised of labour,

management and public-interest representatives will be responsible for

establishing overall Workers' Compensation Board policy direction.

This

bill represents a significant step in giving the main parties of

interest a greater role in charting the future of the Workers'

Compensation Board.

Bill 27 introduced, read a first time

and ordered to be placed on orders of the day for second reading at the

next sitting of the House after today.

THE BRITISH COLUMBIA RECYCLING ACT

Mr. Harcourt presented a bill intituled The British Columbia Recycling Act.

[ Page 6760 ]

MR. HARCOURT :

This important bill is part of the desire of British Columbians to go

down the path of the three Rs, which is to reduce the waste we have, to

reuse and then to recycle. This particular act takes new steps, by

establishing a provincewide recycling program, to reduce garbage

incineration and waste landfills that are threatening our environment.

A B.C. recycling agency will be established to provide financial and

technical support for curbside recycling in all B.C. communities. The

agency will also take action to minimize garbage from non-biodegradable

materials, which include styrofoam and plastic packing, and problematic

waste such as tires, construction materials, motor oils and batteries.

It will also encourage new B.C. markets and industries for recyclable

materials. Lastly, it will encourage research on and development of

environmentally sound packaging products and recycling technologies.

Bill

M212 introduced, read a first time and ordered to be placed on orders

of the day for second reading at the next sitting of the House after

today.

[2:15]

Oral Questions

JOE BOROWSKI'S INCITEMENT TO

BLOCKADE ABORTION CLINIC

MS. MARZARI :

This is a question for the Premier, Mr. Speaker. Yesterday Joe Borowski

indicated his complete contempt for the rule of law in British

Columbia. He incited people to commit a criminal offence by blockading

the Everywoman's Health Centre. He also supported you and your

government. Do you concur, Mr. Premier, with Mr. Borowski's view that

people should break the law to further their own personal view on the

abortion issue?

HON. MR. VANDER ZALM : We do not support the counselling, or the suggestion, that people should break the law.

MS. MARZARI :

That being the case, Mr. Premier, what steps are you taking to protect

the public from the unlawful activities of these hooligans who are

harassing ordinary citizens as they go about their business?

HON. MR. VANDER ZALM :

I think we do from time to time find that people take very strong

stands on issues they are very emotionally involved with, and we've

seen it in this province and this country a number of times. Obviously

in a democratic country people are entitled to speak their piece. I

realize this, however, is a very difficult situation. I can recall

it being debated previously in the House. Perhaps I might ask our

Attorney-General (Hon. S.D. Smith). As a matter of fact, I might also

ask the critic, the member for Esquimalt–Port Renfrew (Mr. Sihota),

what his advice would be in a situation like this.

TOXIC FUEL IMPORTS

MR. CASHORE :

My question is to the Minister of Environment. The minister said on the

weekend that he doubted that fuels coming into British Columbia have

been contaminated with toxic substances as they have in Ontario and

Quebec. He also stated that the amount of toxins in diesel or gas fuels

would be very small. Since federal officials have only just begun

border checks, does the minister have evidence to support his

contentions?

HON. MR. STRACHAN : We do. As a matter

of fact, the fellow who blew the whistle on the New York State–Ontario

problem, Mr. Porterfield, indicated that although he is of a suspicious

mind that some of the contaminated or toxic elements could be mixed

with fuels coming into British Columbia or western Canada, it is quite

unlikely. He cited as his evidence the fact that those fuels would

probably be coming from the state of California. California has for

some time had the most stringent legislation with respect to handling

toxic wastes. On the basis of that, he has said it is highly unlikely,

and he is the one who has brought this to the media's attention.

For

the benefit of the member and the House, since the story broke last

week the ministries of environment, provincial and federal, have been

inspecting all home-heating oil, which is not a big factor in British

Columbia because we have that good, clean-burning natural gas — outside

Vancouver Island, which is another movie. We've also been inspecting

the supply route of diesel fuels and gasolines, and to date we have not

found anything that indicates we have a concern; but we are still

inspecting. Of course, as the member knows, Hon. Lucien Bouchard, the

federal Minister of the Environment, has indicated that all border

crossings will be inspected for fuels.

I thank the member

for his question, and I can assure him and this House that we are being

as diligent as we possibly can in terms of monitoring this very

critical situation.

MR. CASHORE : A supplementary.

How long has the minister known that fuels contaminated with hazardous

substances might be being imported into Canada?

HON. MR. STRACHAN :

It has been a concern for some time, only sort of at the rumour stage.

Ministers of environment have discussed this because there was evidence

that it was happening in the United States for U.S. distribution. We

did not expect, though, that it would be coming into the Canadian

market. Because of the supply system in New York, Ontario and the

eastern states — which includes very small jobbers, a sort of industry regime that you don't see in western Canada —

the possibility did exist and now, of course, has been uncovered. The

suspicion that it was happening, particularly in the eastern United

States for eastern U.S. consumption, has been around for some time.

[ Page 6761 ]

MR. CASHORE :

A supplementary. It is interesting that the minister says there was

some awareness that this might be happening, and we are all very

concerned that actions apparently had not been taken to investigate the

possibility with regard to British Columbia until just a day or two ago.

This

contaminated fuel could be burned in our homes, in our neighbourhoods

and on our streets. Is the minister prepared to take immediate action

to test all fuels entering the province from every possible entry

point — including Alberta and the Yukon — and to set up a squad of

toxic cops to carry out random checks on the home-heating fuels being

sold throughout the province, to test every commercial storage tank in

the province to see if it is permanently contaminated with toxic

substances and to check all outlets in the province selling fuel at

below-market prices?

HON. MR. STRACHAN : That's quite

a list. I would suspect that most of it is in place. If the member had

listened carefully to the answer I gave about three questions ago, he

would have known that all fuel coming into Canada is now being

inspected by the federal government and has been for at least the

greater part of last week.

In terms of the Canadian supply,

the Ministry of Environment is investigating We do know refinery

practices; we certainly know the refinery practices in British Columbia

and Alberta. We know that cannot happen here. As I said earlier, we do

not have the jobber market that exists in eastern Canada and on the

east coast of the United States, so it's highly unlikely that the

practice could be happening.

As I told the member in the

House earlier, we are investigating with all our resources, and we are

being aided by the federal Ministry of the Environment to ensure that

this practice is not taking place and these toxic substances are not

being burned in western Canada.

DOMAN CASE

MR. SIHOTA :

Could the Attorney-General explain his ministry's decision not to call

Bill Bennett as a witness in charges involving the buying of Doman

shares?

HON. S.D. SMITH :

Mr. Speaker, as that member

who is presumably a practising lawyer knows, the issue to which he's

referring is subject to a period of appeal — a decision for appeal

by both of the parties. Therefore it would be extraordinarily

inappropriate for me to answer his question.

MR. SIHOTA :

We're not talking about anything that involves matters of appeal. We're

talking about the Crown's conduct of the case and its decision not to

call a witness who had information. Could the minister explain why,

during the conduct of the trial, his ministry chose not to call that

individual as a witness with respect to the buying. He wasn't charged

with that offence. So why was he not called, Mr. Attorney-General?

HON. S.D. SMITH :

Mr. Speaker, I'm not going to stand in the House and give this member

the lesson he so obviously needs on the conduct of the case. Suffice it

to say that my original answer ought to stand.

CHINESE MEDICINAL WINES

MRS. GRAN : Mr. Speaker, my question is to the Minister of Labour and Consumer Services. In light of the front-page story in Sunday's Times-Colonist

regarding the abuse of Chinese medicinal wines, can the minister

explain why access to these wines should not be regulated to the same

extent as for other spirits that have equally high alcohol contents?

HON. L. HANSON :

The authority for regulating the sale of those products does come under

the general manager of liquor licensing. The issue was first raised

with my ministry in 1987, and at that time we put forward some rules to

the various people who are selling: that all products containing more

than 1 percent of alcohol and which retail for less than $6 per bottle

must be placed in the store in an area that is completely separate and

is secure from public access; that all products containing more than 1

percent of alcohol shall not be sold to minors under 19 years of age;

and that the products may not be sold to persons under the influence of

alcohol or apparently under the influence of alcohol.

Each

of these products is laboratory-tested as well as tasted within my

ministry, and those that are deemed to be unpalatable to be drunk as

such are not restricted from sale as liquors are in that sense. But if

any members of this Legislature or others have an instance where there

is a misuse of these or they are sold improperly by a merchant, if they

would report those to my ministry we certainly would investigate in

detail.

LEGAL ACTION AGAINST IWA OFFICIALS

MR. SIHOTA :

Mr. Speaker, last week there was an incident involving IWA officials in

Maple Ridge and the consequent laying of criminal charges against a

number of those officials where there was a civil injunction in place

mandating particular behaviour. In previous cases, of course, the

Attorney-General has supported the notion of proceeding by civil

injunction as opposed to criminal charges. Could he explain why in this

instance criminal charges were laid and the government did not proceed

in light of the civil injunction?

HON. S.D. SMITH :

Again, that matter obviously is before the court, and the member ought

to have some sensitivity to due process in our system. Nevertheless, so

that he is not able to confuse the public, which frequently is his

desire on these issues, the civil injunction to which he refers has

been acted on

[ Page 6762 ]

and

relates to the area around the location of the facility. The activities

for which the investigating police recommended that charges be advanced

occurred on the road a considerable distance from the site and followed

a number of incidents on both sides of this unfortunate situation.

There was evidence of the escalation of violence, which in their

judgment required police intercession and their recommendation. The

Crown then looked at those matters in the usual way, in light of the

circumstances before them.

MR. SIHOTA :

These

individuals were detained in prison for about 18 hours and held in

custody. Could the Attorney-General explain the reason for that rather

inordinate amount of time in detention? What steps — if any —

are being taken by the ministry to review the circumstances surrounding

that detention?

HON. S.D. SMITH :

The ministry is somewhat ahead of the member. They reviewed the matter

some time ago, and his conclusions are as wrong as his questions.

CONDOMS FOR PRISONERS

MR. PERRY :

I have a question for the Minister of Health. The preliminary results

of a study in Quebec show that the AIDS virus poses a serious problem

inside correctional systems in Canada. Last week the minister told us

he is opposed to letting inmates protect themselves from this deadly

disease by using condoms. What steps is the minister taking to protect

the general population from the spread of AIDS when these inmates

return to the community?

[2:30]

HON. MR. DUECK :

Mr. Speaker, I think the member for Vancouver–Point Grey knows quite

well what we have done in the area of AIDS education. If he would like

to have the total itinerary of what we've done in that area, whether

it's information sent to each household, through the health units, or

education through physicians— which he's certainly familiar with —

I can give him that information. However, as far as distribution of

condoms in jails is concerned, that is the Solicitor-General's area of

responsibility, and I have not counselled or recommended that they

should do so.

MR. ROSE : I have a mild point of order

to put forward. Recently we've seen a spate of government backbenchers

asking questions that look almost as if they were planted. I wouldn't

say they were.

Interjections.

MR. ROSE :

Mr. Speaker, would you mind protecting a rookie from this very vicious

crowd across the way? I was about to say that this is a time-honoured

tradition, and the opposition backbenchers have a right to ask

questions. That is not the point of order. It's the answers that bother

me. It looks as if the minister has been given notice. The answers

sometimes are of interminable length, indicating much research, and

much more explicit and detailed than the answers we get when we spring

a question on them — unless it is the Minister of Finance (Hon.

Mr. Couvelier). These authored questions will continue, I have no

doubt. I wonder if we could keep the answers a little more brief. They

look like ministerial statements most of the time.

HON. MR. STRACHAN :

If I could just respond to that.... Of course, Mr. Speaker, there is a

policy of freedom of speech within this Legislative Assembly. I presume

that all private members in this assembly are treated equally, which

you do with fairness. In terms of the long and somewhat prepared

answers, there is no doubt about that. The question posed to me, as an

example, from the member for Maillardville-Coquitlam (Mr. Cashore), has

been around for seven days now, and to be not prepared for it would be

unacceptable. I had lots of notice that the question was coming. He's a

week late, and what else would I be thinking about? It's a very serious

issue. If the opposition House Leader wants us to apologize for being

prepared, I'm afraid I can't offer that apology.

MR. ROSE :

I was going to refer Your Honour to the point about brief questions and

brief answers, but I'm not going to do that. All I can say to the

government from this side is that I can't win 'em all.

Orders of the Day

Motions on Notice

On Motion 42.

That this House authorize the Select Standing Committee on Forests

and Lands to examine, inquire into and make recommendations with respect to

exemptions under

Part 12 of the Forest Act and in particular, without limiting

the generality of the foregoing, to consider:

1. the criteria and procedures for determining the availability

of the exemptions pursuant to

section 136 of the Forest Act; and

2. the conditions, fees and permits imposed pursuant to

section

137 of the Forest Act; and furthermore, that this House authorize the Select

Standing Committee on Forests and Lands to examine, inquire into and make recommendations

with respect to the prices of timber bought, sold or traded on the Vancouver

log market, and in particular without limiting the generality of the foregoing,

to consider:

1. whether such prices represent or reflect the true market value

of species for export or domestic use;

2. the suitability of such prices for determining the relative

values of different species for the purpose of calculating stumpage payable

under the Forest Act; and to report to the House as soon as possible, or following

any adjournment, or at the next following Session, as the case may be; to deposit

the original of its reports with the Clerk of the Legislative Assembly during

a period of adjournment and upon the re-

[ Page 6763 ]

sumption of the sittings of the House, the Chairman shall present

all reports to the Legislative Assembly.

In addition to the powers previously conferred upon the said

Committee by the House, the Committee shall have the following additional powers,

namely:

(

a) to appoint of their number one or more subcommittees and

to refer to such subcommittees any of the matters referred to the Committee;

(

b) to sit during any period in which the House is adjourned,

during the recess after prorogation until the next following Session, and during

any sitting of the House;

(

c) to adjourn from place to place as may be convenient; and

(

d) to retain personnel as required to assist the Committee.

HON. MR. PARKER : Mr. Speaker, I move motion 42 standing on the order paper in my name.

Motion approved.

HON. MR. STRACHAN :

Mr. Speaker, I have a couple of items to ask the House. I ask leave for

the Select Standing Committee on Public Accounts to meet today at 3

p.m. while the House is sitting.

Leave granted.

HON. MR. STRACHAN :

Secondly, pursuant to the motion just raised by my hon. colleague the

Minister of Forests (Hon. Mr. Parker), I ask leave for the Select

Standing Committee on Forests and Lands to meet at 2:40 p.m. today

while the House is sitting.

Leave granted.

HON. MR. STRACHAN : Mr. Speaker, I call committee on Bill 3.

TRADE DEVELOPMENT CORPORATION ACT

The House in committee on Bill 3; Mr. Pelton in the chair.

Section 1 approved.

section 2.

MR. GABELMANN :

I want to ask the minister to tell the House the reasons for

establishing a board of not less than 15 and not more than 30 persons.

What reasons does the minister have for reserving the right to appoint

a board of such size?

HON. J. JANSEN : Obviously, to

put in place a board, there has to be a fairly large representation

from a number of standpoints. The first is that to get a quorum we need

a fairly large board, recognizing that many of the members are in

business and extremely busy, and getting committee representation and

so on would be much more difficult if it was a small board. Secondly,

and perhaps more importantly, we wanted to ensure, as much as possible,

representation from the many groups around the province that represent

industry and the various commercial organizations that promote industry

and trade for British Columbia. It is a board taking into consideration

those parameters.

I realize that a board of 30 members is

perhaps seen to be unwieldy, but certainly it's very difficult, unless

you have a fairly large board, to get that representation, not only

geographically but also in terms of industry.

MR. GABELMANN :

I wonder whether the minister would take a minute or two to describe

what he sees as the role of the board. Is it a board that will be

actively involved in administration of the corporation, or one that

will have very much an arm's-length relationship? Just what kind of

relationship to the administrative structure will this particular board

have?

HON. J. JANSEN : The corporate board is a board

of a Crown corporation and would have the responsibilities and duties

of normal Crown corporations, particularly on a new trade corporation

where we are developing policy and some of the initiatives that the

corporation will be undertaking. I expect the board to have significant

involvement generally, but also in terms of the board's audit, credit

and executive committees. They would have a very close relationship

with the staff, bringing forward policy initiatives.

MR. GABELMANN :

One assumes that the board would be involved in making decisions about

loans, loan guarantees or financial assistance of one kind or another

that the trade corporation makes to potential exporters. Is that

correct?

HON. J. JANSEN : The anticipated structure

of credit granting is under review, but to focus for a moment on the

loan guarantees and so on, the credit committee would make

recommendations to the board. In certain situations the board would

approve it, and following that, the credit committee would recommend to

Treasury Board. Treasury Board would have some involvement in the

larger loans.

MR. GABELMANN : Just to digress for a

moment from my own line of questioning, the minister says Treasury

Board approval would be required for larger loans or loan guarantees.

What amounts are we talking about here?

HON. J. JANSEN :

The entire question of limits will be addressed through the actual

program when it is announced, We are dealing with Treasury Board, and

they would like to see the same kind of limits as are now apparent

through our Crown corporations. Suffice it to say there will be a

strong control to ensure, first of all, that we stay within our budget

framework, but also to ensure that the policy is applied consistently.

[ Page 6764 ]

MR. GABELMANN :

In debate on second reading, we indicated support for the concept of

this corporation but had very real concern about the fact that no

section of the bill provides any real information about how this trade

corporation is going to be run. I had hoped that during debate at

committee stage we would be able to get some answers as to just how the

corporation would be run, what kind of constraints would be in place

and what kind of protection would be ensured so that the public— whose money it is, after all — is protected.

go back to the line of questioning that I was beginning a few minutes

ago, the board is going to be making decisions on approving loans, loan

guarantees or assistance of one kind or another. The board is comprised

of perhaps 30 business people. Presumably these are going to be people

who are active in the export business. Presumably we are going to have

a situation where theoretically, at least, 25 or 30 of the largest

exporters in the province will be represented on the board of directors.

Does

the minister not worry a little about the potential conflict of

interest that will be involved in this particular situation with such a

wide variety of representation, such a large group? No doubt, when a

particular company's bid or application comes before the board, that

director will absent himself, but we all know how these organizations

work. They become cozy after a while.

I wonder what the minister's response is to those concerns.

HON. J. JANSEN :

First of all, let me correct one statement. It is not the intention

that on the board of directors we would have directors from large

corporations in the province who already are in the export business

and, certainly, are doing quite well without the assistance of the

Trade Development Corporation. What I've said before is that the Trade

Development Corporation would be focused on the small to medium

exporters, and in fact the board of directors, when we do bring them

forward, will be a board of directors who represent these small to

medium-sized companies in the province who are exporting.

The

matter of conflict of interest is what the member is speaking about.

It's certainly of concern that where a decision is made, conflict of

interest is not part of that decision-making process. We have in the

bill, as you are aware — and perhaps we'll be speaking about it later —

provision that the Company Act applies in terms of the board of

directors, but further to that, to strengthen it, to bring forward a

specific outline of conflict-of-interest guidelines for the board which

will enhance the conflict-of-interest criteria that are outlined in the

Company Act. There will be very clear guidelines, very clear targets in

terms of conflict. Where there is a conflict, of course, it's required

that the board member would absent himself.

[2:45]

MR. GABELMANN :

What form would these conflict-of-interest guidelines take? Would they

be included in another act to be presented to the House? Would they be

included in regulations attached to this act? Would they be like the

cabinet guidelines: simply just a statement out of the minister's

office? How would these guidelines be developed, and how would the

public be guaranteed that these guidelines would in fact be appropriate

and enforced?

HON. J. JANSEN : First of all, as the

member is aware, the guidelines or the requirements that are

incorporated in the act are those that relate to the Company Act. We

are working with the Attorney-General's department and with the board,

and we will be announcing what those conflict-of-interest guidelines

are so that the public is aware of what the strict guidelines will be.

It's

not incorporated in this act because I wanted to have the ability to

talk to the board and understand the concerns both from a public

standpoint and from that of the Attorney-General, and bring those in

through his regulations as far as the board is concerned.

MR. GABELMANN :

If I understand the minister correctly, he is saying that he wants to

talk to the board before he develops conflict-of-interest regulations. Just think about that for a minute.

It seems to me that a

person accepting appointment to this board should know what the rules

are before the appointment is made and accepted. I also think that

before this Legislature provides carte blanche, this Legislature should

have an opportunity to know what the rules are. How can we possibly

pass a bill that includes a

section establishing a corporation with up

to 30 directors who have, as far as this Legislature is concerned at

the present time, wide-open sesame? If we're talking about 25 or

30 — or up to that many — small or mid-sized British

Columbia corporations, these are just the corporations or businesses

who will be in the market for financial assistance, for loan guarantees.

I'll

come at it another way. I wish the minister would explain to this

House, first of all, why he wants the people who are going to be in

receipt of the money to be making the decisions about the money. Let's

ask that one first.

HON. J. JANSEN : I'm wondering why the member hasn't — perhaps he has —

gone through the Company Act, which is very clear in terms of the

obligations on a director to disclose his interests: the

director-liable-to-account section, 145 of the Company Act, and 146,

and disclosure of conflict of office or property under

section 147.

Those are statutorily in the bill, and I have indicated to the member

that we will be looking through that to determine if any other

conflicts could arise that we should be aware of and that we could

prevent from happening.

I'm surprised that he feels that I should have that all in my mind prior to going into the corporation — prior

to developing our programs. As we go along, I'm sure that a lot of this

information will become clearer, as well the necessity for us to have

very clear

[ Page

6765 ]

and concise additions to what is quite strongly incorporated in the Company Act.

forget the other question that the member had. Is it relating to the

size of company? Oh yes, Mr. Chairman, it's coming back to me with

great clarity now.

It was the question of the board making a decision on its own account, so to speak —

members on the credit committee of the board making decisions on their

own loan applications. Well, obviously that's not the case. They would

be making decisions on loan applications in industry, generally

speaking, and understanding the conditions that apply as far as export

is concerned, the limitations that equity financing has and some of the

concerns that the export community has. That's where we draw on the

expertise and skills of the board and their experience and their

ability to advise on the applications before them.

MR. WILLIAMS :

Mr. Chairman, it's reasonable that some fundamental guidelines be in

place from day one, so that people asked to sit on the board can

determine then whether they can comply with the guidelines before they

sit on the board.

The member for North Island (Mr.

Gabelmann) is asking a simple, fundamental question that deserves a

better answer than the amateurish performance we're getting from this

minister right now. Mr. Minister, you might elaborate on the whole

question of how much you're planning on lending and the kind of market

niche you see that is not being filled currently by the private sector

or the banks.

You say the credit committee will make some

report to the board on the kind and the size of loans. What kind of

stuff are you talking about? We want to know the numbers. You're

talking about small to medium exporters. Okay, if that's what we're

talking about, what kind of loan size are you talking about in terms of

their needs? Maybe you could elaborate on how and where these are not

being met in the private sector.

HON. J. JANSEN : Mr.

Chairman, we're jumping all over the place, and the power and capacity

of the board is discussed in

section 3 of the bill. If the member

wishes to jump to that

section now, we could talk about that. I thought

we were dealing with the other line of questioning that was previously

raised.

It's the intention of the Trade Development Corporation to be involved

in areas that the banks currently do not look after, and that's essentially

pre-order financing — equity financing — to assess export operations. It is

not to replace in any way what is being done through the banks; in fact, it's

an export guarantee program. It will be complementing many of the organizations

whose mandate from a federal standpoint is to assist in export opportunities

as well. I'm talking about CIDA, EDC and the Canadian Commercial Corporation.

Those are entities whose mandate is to provide export assistance. I see the

corporation filling the niche that is currently not met by any of those corporations,

and in fact assisting the exporters of the province to make sure that they have

a fully covered operation and an opportunity to export their product.

MR. WILLIAMS :

If it's equity financing we're talking about here, then we're talking

about risk — presumably fairly high-risk financing that the banks

won't touch. Is that the situation, Mr. Minister?

HON. J. JANSEN :

As the member for Vancouver East knows quite well, being a corporate

officer in a major credit-granting institution, any loan constitutes a

risk. It's a question of collateral that concerns exporters and those

who.... It's not only collateral; it's the conditions that many of the

countries the exporters deal with impose on clients that are of concern

to the exporters.

We see the corporation as very similar to

the ones in Alberta, Ontario and many other parts of the world, where

you guarantee assistance to enable the export transaction to take

place. Yes, there is certainly a degree of risk, and as we announce our

programs, we'll be applying some revenue measures to take that risk

into consideration.

MR. WILLIAMS : Then is the minister seeing this as a profit-making institution?

HON. J. JANSEN :

I would not see the corporation in its entirety to be self-liquidating.

But as we develop those programs over time, some of them would

certainly be self-supporting.

MR. WILLIAMS : Now the

minister is saying that this is not going to be a profit-making or even

a break-even institution; it's going to be an institution that loses

money. Is that what he's saying?

HON. J. JANSEN :

There are a number of components to the B.C. Trade Development

Corporation. Its primary objective is to provide marketing assistance

for our products worldwide and to provide a marketing arm for the

ministry, essentially. We've done that, concentrating in six sectors of

the economy. That's a very major part of the corporation, and we would

obviously see charging for marketing initiative as very difficult,

given that you have to focus the marketing on one particular client in

order to charge that client. That has been going on for some time, and

it's no different than what happens in other jurisdictions.

The

other programs relate to export assistance. When we get into export

assistance programs, some of them lend themselves to charging flat-fee

rates. But again, operating through banks, credit unions and trust

companies, the B.C. Trade Development Corporation is simply there in a

guarantee role only.

MR. WILLIAMS : But if you

guarantee a loan and the guarantee is called, that's it. It's the

public's expense, isn't it? The minister nods his head.

Maybe the minister could advise us about his business plan for this corporation, Maybe that's the

[ Page 6766 ]

way

to get the information we legitimately require in order to make some

determination about this bill. What's the business plan in the first

year and over five years, Mr. Minister, in terms of anticipated losses

for this corporation?

HON. J. JANSEN : The losses of the corporation relate — as the member opposite indicated —

to claims on guarantees relating to an export assistance program. The

budget that we'll be talking about during our estimates reflects the

claims we anticipate over time and the reserves necessary to deal with

those claims. The estimates we've used in our budget, which will be

coming on the floor of the House, we've determined by speaking to those

who have very similar programs. It's very difficult to anticipate your

expenditure from one year to the next; and of course, it relates again

to the whole question of how you make your decisions. I know they have

them in credit unions and banks.

We have a credit committee

which reviews the exposure risks and makes recommendations to the

board, so it's no different in that regard — except that the B.C.

Trade Development Corporation would be in an area where traditionally

none of the lending institutions have been offering their services.

MR. WILLIAMS :

The minister avoided any reference to a business plan whatsoever other

than referring to the estimates. Can the minister advise us if there is

a report available for members of the Legislature on the business plan

of the corporation for the first year and the medium term? And what

maximum amounts are anticipated in terms of lending guarantees?

[3:00]

HON. J. JANSEN :

The determination by the government to put the B.C. Trade Development

Corporation in place came in July last year. As you know, in July last

year we filed a paper called "An International Business Development

Strategy for B.C." Included in that was the B.C. Trade Development

Corporation. It outlined what we saw the role of the B.C. Trade

Development Corporation to be, in three areas. There is a marketing

strategy, and over time, as the board gives us the input, we'll be

developing a marketing strategy plan. Already we've established a

number of key areas where we see the marketing to proceed. The other

two areas are those relating to some of the programs that will assist

the corporation to address the types of programs and guarantees and so

on that the member is speaking about. So there are three aspects to the

corporation, and they were covered fairly extensively in the document I

referred to.

I don't know what else the member wishes me to elaborate on. I certainly can answer his direct questions.

MR. CHAIRMAN : The first member for Vancouver East.

Interjection.

MR. WILLIAMS : I don't know if that will reassure me or not, Mr. Premier.

I'm

still wondering about the maximum amounts, Mr. Chairman, in terms of

initial guarantees. In a lending institution you would normally limit

your loans relative to your equity position, so that you wouldn't loan

beyond X percent of your equity in any lending exercise. Isn't there

some basic rule of thumb for this corporation as well?

HON. J. JANSEN :

I'm kind of surprised at that question, given that this member has a

fair bit of seniority in this House and would know that the corporation

is limited by virtue of its estimates in its budget. When the programs

come forward, we outline in detail how we expect those new programs to

function. The bottom line in any Crown corporation or ministry is that

you're guided by what the estimates have produced. The estimates will

be debated in the House. They are there for the member to look at. We

can talk about those when the estimates are on the floor of the House.

MR. WILLIAMS : That's a good try, but you've got unlimited borrowing powers that commit the Crown.

Interjection.

MR. WILLIAMS :

Sure you do. It's right here in the statute. They are absolutely

limitless. Unlike B.C. Hydro, which is limited to merely $9 billion or

$10 billion, they're limitless in this one. We've already gone through

that burial routine for BCDC and BCEC. I shudder at the kind of funeral

expenses for the Trade Corporation. When we get to it, I'm sure the

member for North Island (Mr. Gabelmann) has some thoughts about

limitations on borrowing and amendments in that regard. Surely the

minister is aware that he has limitless borrowing powers here that are

all outside estimates and the normal budget process.

HON. J. JANSEN :

The borrowing powers are those that the Minister of Finance, through

Treasury Board, enable the corporation to have. In the budget process

there have been reserves and provisions for loan losses and guarantee

losses. That is the criterion, the bottom line which the ministry must

operate within. We cannot commit beyond what we anticipate the budget

provisions will provide for as far as both of those write-offs are

concerned.

MR. CLARK : I have some more mundane

questions on

section 2 for the minister. We have several specific

problems with the bill, but I would like to deal with the ones that

arise out of

section 2, because that is one of my real concerns.

Thirty

members on a board of directors strikes me as being way out of line.

With all due respect to the minister, it's more like a club than a

board of directors. It's hard to have a functioning board of

[ Page 6767 ]

directors

approving decisions when you have as huge a gathering as seems to be

contemplated in this bill, with no rationale or defence given by the

minister today. I wonder if we could have some questions around the

committee structure that seems to be envisaged.

Oh, the Premier is giving some advice; that may be some rationale. I would appreciate that, because we haven't had that to date.

The

minister did say that a credit committee would be formed. I notice it's

not in the bill. Perhaps we could talk about that committee. I'm sure

the Premier is aware that when you have a big committee you actually

have a smaller committee, which is the real committee, that ends up

doing a lot of the work; you then have a big committee, to which you

have to go to get everybody to approve it. It seems to be an

inevitable, almost bureaucratic syndrome that when you get a small

working committee they work, and then the larger they get the more

difficult it is to have them an actual working board of directors.

Because

this is an international trade corporation, you can't help but be a

little cynical about it being a nice little perk for somebody,

especially if there is any travel involved with this. A huge board of

directors, you can put lots of your friends on — excuse me; you can put lots of people on —

and they travel around the world at taxpayers' expense. We're concerned

about that on this side of the House. As the member for North Island

said, we support the principle of the bill, but we're really concerned

about what would appear to be weaknesses in the bill, and not an

articulated defence, not a tough enough defence, not a tight enough

defence, one which gives us some assurance that this isn't open to

abuse. Maybe with respect to specific questions, the minister could

tell us how many of the members of the board of directors would be on

the credit committee, how many committees of the board are envisaged,

and how many people are likely to be on those various committees.

HON. J. JANSEN :

Mr. Chairman, it's very difficult to be specific when you don't get

specific questions relating to the general comments that the member

indicated. As I said before, the reason we had a large board was to

recognize the various geographic parts of the province. Recognizing

that, we had a number of industry sectors that were extensively

involved in export, and we wanted to ensure that they were very much

part of this process as well.

I can't answer what the

future will hold, but certainly current planning indicates we would

have three committees to start off. As provided in the bill, the

committees would be an executive committee, an audit committee and a

credit committee. The reasons for each of those, I think, are quite

apparent and quite necessary and, in fact, no different than most

private companies and lending institutions. So it's not an unusual

situation.

The executive committee is comprised of eight

members; the credit committee, five; and the audit committee, five.

Each one of those would draw on the expertise of those members, because

I wanted to ensure that when the board was finally put in place it

would have expertise from the financial community and the audit

community, expertise that we could rely on in each of those sectors.

That's what I perceive to be in place initially. Over time, if the

board feels that other committees are necessary, I'm sure that they

will be structured.

MR. CLARK : A private sector

board doesn't normally have 30 people, but it does normally have three

committees. So now we know that the real committee is the executive

committee and that's where decisions will be made, and the others are

there for whatever perks go with the job, I'm sure.

contemplates remuneration for these members of the board. Maybe the

minister could tell us what the remuneration will be, at least

currently. This, of course, allows rates fixed by the

Lieutenant-Governor-in-Council, which I understand. You wouldn't

necessarily want to engrave in the bill in perpetuity an actual rate.

But maybe you could tell us what the rate will be at the moment.

HON. J. JANSEN :

Mr. Chairman, currently there is no rate. The nominees we want to put

forward to the board of directors have not raised the issue. Certainly

that's not in their minds, it being an important point to become part

of the corporate board. Their contribution is to assist the province of

British Columbia in developing its export community and its export

potential, and the question of board fees has not come up, nor has it

come up in any other discussions. I don't intend to raise it at this

point in time.

MR. CLARK : Is the minister saying, then, that there will not be a per diem allocated at this time?

HON. J. JANSEN :

Mr. Chairman, as I said before, we are covering expenses of the

directors. The question of board director fees has not been discussed

or brought up, and it's not my intention to do so in the foreseeable

future.

MR. GABELMANN : We're dealing with the

section to establish the corporation. One of the areas that I want to

get more clearly established in my own mind is the relationship of this

Crown corporation to the government. With respect to the 30 potential

directors, roughly how many of these would be ministers or MLAs in

category one and, secondly, public servants, people outside of the

private sector?

HON. J. JANSEN : Mr. Chairman, it's

difficult to say, obviously, before the board is put in place. It is my

proposal that there would be the minister on the board of directors,

the parliamentary secretary to the minister, and the president, who

will be the deputy minister. That's it, as far as the public sector

involvement is concerned; the rest is all private.

MR. GABELMANN : The deputy minister would be the president and CEO of the Trade Corporation;

[ Page 6768 ]

the

minister would be the chairman, as they say in old-fashioned language,

of the board; and the parliamentary secretary would also be on the

board, in some capacity or other, as a member. That's the extent of the

public sector involvement? The minister nods his head.

Mr.

Chairman, I wonder if the minister might take us through the thinking,

briefly, that led to the principle of having the deputy minister also

act as the president and CEO of a Crown corporation.

HON. J. JANSEN :

I think, many times, Mr. Chairman, we have situations where there is a

redundancy of effort as far as a ministry and a Crown corporation are

concerned in whatever field, because by the sheer nature of the Crown

corporation, because it is a legal entity on its own, it would operate

in a way that would see its own mandate perhaps differently than the

ministry mandate.

Throughout the process of being minister,

I have had a lot of concern about.... There are organizations in the

community which essentially do very similar work to that which the

ministry has historically done or is currently doing. It is my purpose,

as much as possible, to eliminate that redundancy and work with the

community groups to ensure that we in government don't duplicate what

is being done elsewhere.

I have the same concern about this

corporation. I wanted to ensure that there was a continuity of

initiative, that there wasn't redundancy and that the left hand knew

what the right hand is doing, given that the mandate of the corporation

is marketing and that marketing is its primary goal. That plays such an

important part with the rest of the ministry that I felt it important

the administrative side be totally in sync — the ministry and the Trade Development Corporation.

MR. GABELMANN :

I understand the rationale and the motivation of the minister and the

government in respect of the close working relationship between the

ministry and the corporation, and I can understand all the good

arguments for it. We may well find as time goes on that it is a system

which proves to be inoperable, that there will be some very real

difficulties. I suggest that members of the House might want to keep a

close eye on just how that works. It's not something that's done

commonly, if at all, and I think it carries with it some very real

risks.

[3:15]

If there is a full complement of 30 members, presumably there are 27 private

sector or non-public representatives on the board. Is it the minister's

intention that all 27, or up to that number — the remainder — come from and

represent either manufacturing concerns, export companies themselves or their

trade organizations? What kind of balance is there between the trade organizations

or the industry organizations that might exist and the companies themselves,

and what other representations will there be on the board? Will there, for example,

be trade union representatives? Will there be academic representations and any

other kind of representation on this board?

HON. J. JANSEN :

Obviously, if you wished to ensure that every sector of our society and

our economy were represented, the 30 people would probably have to be

expanded to 300 or some such number. It's very difficult to ensure that

all the interests of the province in terms of export development are

represented. What I have tried to do — and will when we make the order-in-council — is

ensure that the representation is that of the mining, forestry and

tourism sectors, but also following through and making sure that a lot

of those members, as they come forward, have had some liaison or

interest with many of the organizations that also promote trade: the

chambers of commerce, regional economic development commissions in the

province and those types of things.

As the member can

appreciate, it was a difficult task to determine what type of

representation should be on the board. I would like to have a much

larger board if I wanted to ensure that everything was met, but you

obviously can't do that. I don't indicate that there will be 30 members

to the board; in fact, I anticipate that the number will be less. But

as much as possible we tried to ensure that the various economic

sectors of the province were represented, given that we had a focused

approach, that we realized there were only X number of dollars

available and that we had, as much as possible, to focus our targets on

the various sectors within our economy.

MR. GABELMANN :

The minister anticipates that the number will be less than 30. I'd like

to help the member confirm that anticipation by moving an amendment to

section 2(1). The Chair has a copy of the amendment. It would change

the wording, "a board of directors of not less than 15 and not more

than 30," to read: "a board of directors of not less than 10 and not

more than 15 persons." I will read the new

section as it would read if

it were amended: "There is hereby established a corporation to be known

as the British Columbia Trade Development Corporation, consisting of a

board of directors of not less than 10 and not more than 15 persons

appointed by the Lieutenant-Governor-in-Council." I would so move, Mr.

Chairman.

MR. CHAIRMAN : The table has had the

opportunity to read the proposed amendment, and it certainly does not

appear that this changes the intent of the bill before us, and so the

amendment is in order.

On the amendment.

MR. CLARK :

We've had no specific defence from the minister that gives us any

grounds not to move or support this amendment. I think we on this side

of the House can appreciate — I certainly can — the need for some kind

of sectoral balance, but we have to guard against it simply being some

kind of

[ Page 6769 ]

boondoggle,

some kind of rewarding of friends of government, or some such thing. It

seems to me this would be a nice board to get on, especially if there's

any travelling. The minister can dole it out as some kind of perk.

That's what we're concerned about.

We think 15 gives

adequate range for the minister to appoint from regions and for some

sectoral balance. We are not trying to be vindictive or anything else;

we're simply trying to keep a tighter focus. As the minister said, it

could be 50. If we wanted to try to get all sectors represented, it

could be 300. We understand that, but that's not what boards of

directors are used for. They're presumably used to help run an

organization. We think 15 is more than adequate to do that. It's

certainly larger, I think, than any other Crown corporation board in

the province. Other Crown corporations — like B.C. Hydro, which has billions of dollars at its disposal —

do not have 30-member boards of directors. Presumably the government

tries to be balanced in terms of regions when making appointments to

those boards.

We think this is an appropriate amendment

which the minister should support, particularly in light of the fact

that we haven't seen a specific defence to justify upwards of 30.

HON. MR. VANDER ZALM :

I don't know how much research went into the suggestion of 15 and ten.

It probably came up fairly quickly. I can assure hon. members that the

ministry put a great deal of time into determining what the number

ought to be.

Frankly,

I would hate to see us arrive at a

situation where we'll have sufficient numbers to give representation to

the various groups that we want to see represented from the lower

mainland and the lower part of Vancouver Island because they're handy

and close to where much of the activity tends to be. This is why I

could certainly support the number that was given by the minister in

the bill, which would allow us to have representation from all parts of

the province. This is not to say they could always attend all of the

meetings. As the minister suggested, there could be a working

committee — an executive — that would meet on a fairly

regular basis, while the larger committee would possibly not meet quite

as often.

think North Island should have some representation. I think the

Cariboo, the Kootenays, the Peace River country and all of those areas

should have an opportunity to have some input, because we're dealing

with something extremely major. This group will be part of developing a

new strategy for this province in keeping with the goals of this

government to diversify the economy. We don't want to be dependent on a

single industry in some particular region or city in this province. All

British Columbians, regardless of where they live, deserve a choice.

They deserve a choice of job opportunity. I would like to see it for

our people in all parts of the province.

What this

government has been striving for is to see children continue to live

with the family, with their friends, with the people they know, in

places like Grand Forks, Cranbrook, Quesnel, Williams Lake, Prince

George or wherever and not always have to migrate to the lower mainland

or Victoria. Heaven forbid, if the NDP ever became government they

would all be stored in towers here in Victoria as a part of the

bureaucracy. Every day we hear another suggestion. What was it today?

Today we had a toxic squad. I think somebody estimated this to be

10,000 people.

What I'm saying is, we don't want to deny

our people in other parts of this province being a part of the

tremendous potential that exists in this province.

Interjection.

HON. MR. VANDER ZALM :

The second member for Victoria (Mr. Blencoe) says: "Why not 50? Why not

100?" That's typical of the NDP. They throw out these wild suggestions.

Where did the number 15 come from? I don't know. I listened to the

arguments put forth by the second member for Vancouver East (Mr.

Clark), and I appreciate those. They're rational. He's certainly an

intelligent member for whom I have respect. But right next to him sits

the second member for Victoria. You spoil it for the NDP. You give

people the assurance that socialism is taboo because there are those

wild people in the group who make ridiculous statements. "Why not 50?

Why not 100?" How dumb!

We've put a lot of work into this.

We didn't just invent this overnight, as the NDP might do. It has taken

a lot of preparation. The minister has come forth with an excellent

recommendation that will give all of the groups and regions

representation on the board. Regardless of where people live in this

great country, they're all looking to British Columbia because we're

taking that great leadership role and making things happen. More people

are moving to British Columbia now than at any other time in the

history of this province. People in Alberta, Saskatchewan, Manitoba and

Ontario are looking to this province, because it is the place of

opportunity. There's a diversity developing in this province such as

we've never seen before, and we're seeing all regions of this province

prospering. It isn't happening just in Vancouver East or Vancouver

Centre; it's happening throughout the whole province. That's why this

committee must be representative of all the regions of this province.

would urge this House to turn down this irresponsible NDP amendment to

change the numbers for no particular reason, except that they want to

have something to say. By all means, do not accept the further

amendment that might come from the second member for Victoria (Mr.

Blencoe) that we change it to 100.

MR. GABELMANN :

The Premier's comments about the alleged radical nature of the second

member for Victoria (Mr. Blencoe) reminds me of what Social Credit

members all over North Island say about the Premier in respect to his

caucus.

I am going to make a few comments in response to the Premier, but I understand the member for Surrey-

[ Page 6770 ]

Guildford-Whalley (Ms. Smallwood) has introductions to make.

MR. CHAIRMAN : Shall leave be granted?

Leave granted.

MS. SMALLWOOD : Mr. Chairman, in the precincts today — I'm sorry but I think the elementary school has just left the gallery —

are 43 grade 7 students and four adults from Riverdale Elementary

School. They have a special guest with them from Quebec: Ms.

Arseneault. I'd like the House to join me in making them welcome.

Interjection.

MR. GABELMANN :

The Premier made an interjection which changed the level of debate, but

I won't respond in kind — although I'm tempted — because

if we do, we may well be on this bill the rest of the day and perhaps

longer. I don't think that members are keen about having that happen.

am interested in the Premier's response that it's necessary to have 30

people on this board so we can have people from various regions in this

province. Even North Island will be represented, and presumably almost

every community in the province will have an opportunity to be

represented.

I can tell the Premier that when he directs

his cabinet legislation committee, he might want to direct them to

bring in amendments to the B.C. Ferry Corporation so that we can have

representatives on the Ferry Corporation board from Port Hardy,

Quathiaski Cove, Campbell River and every community where B.C. Ferries

serves, because the same principle would apply.

If we're

going to establish Crown corporations on this basis, we might think of

amendments to the B.C. Hydro act as well, so that consumers of Hydro

around the province and communities which are impacted so greatly by

Hydro's activities in terms of dams can also have representation on the

board of B.C. Hydro. We may as well have Crown corporations with 30

members on the board of directors in every case.

That kind

of big government is something that we on this side of the House are

not in favour of. We think that big government is the exclusive

preserve of Social Credit in this province, and we want to reduce the

size of government. Therefore we would like this amendment to pass.

HON. J. JANSEN : Mr. Chairman, obviously we can't accept that motion to amend.

I'm

a little surprised actually that on the one hand the member said that

we should enlarge all the other boards of our various corporations, and

on the other hand, he makes a motion to reduce the size of this one.

I'm not quite sure where they're going at this point in time.

said before that we wanted to ensure that representation was throughout

the province as much as possible. We also identified the key areas of

our economy that we should represent on the board. We wanted to ensure

that we had input from agriculture, fisheries, natural resources and a

whole host of areas before we determined policy direction from the

board.

[3:30]

The other thing we talked about — but it seemed to be overlooked in this amendment —

is that the executive committee and the committees of the board sit far

more regularly than the board. We look to the board for general

direction and policy determination, but in fact a lot of the work would

be done by the executive committee discussing in more detail the

initiatives that we're putting forward.

We would be unable

to support the amendment; we have a responsibility to the regions of

the province to ensure that we're getting a balanced board recognizing

all the interests of the various sectors of our economy.

Amendment negatived on division.

MR. GABELMANN :

Continuing on

section 2, Mr. Chairman, I'd like to move another

amendment which relates to the question of the minister's role on the

board of directors. The amendment would be a new section. I've

suggested it be 2.4, and then renumber the others after that. It reads

as follows: "The minister responsible for the corporation shall not

serve as chairman of the board of directors."

MR. CHAIRMAN : The amendment is in order. It doesn't change the intent of the bill.

On the amendment.

HON. J. JANSEN :

That amendment is obviously unacceptable. I talked about the need for

us to ensure that there isn't a redundancy of effort and that there is

good synchronization of effort for economic development from an

international standpoint. I told the member that I felt it extremely

important to have that communication link and that continuity of

interest, and as such I cannot accept the amendment.

Amendment negatived on division.

Section 2 approved.

section 3.

MR. GABELMANN :

Just a clarification on this. The relationship of this particular

corporation to the ministry is different from the relationship of other

Crown corporations to the respective ministries or to the government

itself. First of all, in the minister's mind is it fair to call this a

Crown corporation?

HON. J. JANSEN : Yes, Mr. Chairman, it is a Crown corporation.

[ Page 6771 ]

MR. GABELMANN :

Given that, Mr. Chairman, I assume that as a result of this and other

sections of this bill and other acts it will have the same

accountability to the Public Accounts Committee as any other Crown

corporation.

HON. J. JANSEN : Yes, Mr. Chairman, it will have the same accountability.

MR. GABELMANN :

Given the fact that most Crown corporations are not accountable in any

regular fashion to the Public Accounts Committee, given that the

committee meets only when the House sits, and even then not frequently,

given the large number of Crown corporations in this province and given

the particularly delicate nature of the funding and financial

assistance being envisioned by this corporation, is it the minister's

intention that there be any accountability process other than the

Public Accounts Committee in order to be sure that the activities of

the corporation are accountable in the fullest and fairest way?

HON. J. JANSEN :

There are a number of control mechanisms, of course. The first and

foremost, I guess, is the interest the auditor-general would have. He

certainly has access to the corporation records and could at any time

wish to do a review of any of the programs the corporation was involved

in, That's certainly within his mandate. Secondly, the corporation,

through its auditors, would also have that accountability. But the

Public Accounts Committee can also, through their normal process,

obtain information as it's currently doing from B.C. Hydro. It could

obtain information it wishes in terms of looking at some of our

programs and doing some review.

MR. CLARK : I have

some real concerns about this

section of the bill. This

section allows

grants to be given to export companies, loans to be given to export

companies, loan guarantees to export companies. I remember the Premier,

when he was running for leader of his party, talking about all these

grants and loans to business and how terrible they were, and how he

pledged to eliminate them. Here we have a bill which, I think,

potentially expands dramatically the amount of money and assistance to

business in British Columbia, particularly with respect to exports.

wonder if the minister could comment. The whole thrust of this

section

appears to be a violation of both the General Agreement on Tariffs and

Trade and the free trade agreement.

HON. J. JANSEN :

Obviously, Mr. Speaker, we wouldn't put in place a corporation that

would not be GATT-consistent, nor a corporation that would violate the

provisions of the free trade agreement. The areas of interest the

corporation has are as indicated by the member, but also again limited

by the amount that our budget does give us as authorization. A number

of the grant programs we are talking about are those that grant

assistance to a company or group of companies that wishes to

participate in a trade fair, for example, or trade mission. That's the

kind of grant we would be talking about. It's not an outright grant

that would place us in violation of any of the provisions of either

GATT or the free trade agreement.

MR. CLARK : That's

not what the bill says. The minister can say it's for trade missions.

This says, "...make grants to an export enterprise to facilitate the

export and sale of its goods and services." If I can use an analogy

that I think the Minister of Energy (Hon. Mr. Davis) used, which by the

way I think is apt when you are dealing with GATT, subsidies that are

for broad social purposes may be acceptable in some respects, but using

a rifle — I think that was the analogy the Minister of Energy used —

to target a specific subsidy for a specific firm for any reason,

particularly for export, is a violation of GATT. That seems to be

precisely what is contemplated in this bill. If the minister can tell

us that grants or moneys used in aid of exporting will be for trade

missions, trade shows, visiting Switzerland, or whatever it is that the

minister and other members of cabinet did, then clearly, in my layman's

view, that doesn't appear to be a violation of any international treaty.

I'm

concerned that this bill is very wide open. It seems to me that the way

in which this

section in particular is worded is specifically to

contemplate money going to specific companies for specific exports.

That's what appears to me to be a violation of GATT. I wonder if the

minister could comment on that.

HON. J. JANSEN :

Obviously we would not put in place provisions that would contravene

GATT principles or be inconsistent with GATT rules. The grant program

that we are talking about is a general type of assistance program to

assist in marketing. It is not a subsidy to a product. It is not a

subsidy to an industry that would essentially create an unfair

situation for trade as far as another market is concerned. No, it's

essentially there for market development and market promotions, such as

trade missions, market research, travel for market development and that

type of thing related to companies in the province of British Columbia.

It is not an industry sector subsidy in a general sense that would lend

itself to a challenge under GATT.

MR. CHAIRMAN : The member for New Westminster asks leave to make an introduction.

Leave granted.

MS. A. HAGEN :

Thank you, Mr. Chairman, and thank you, members. It's not often that

members of the student body of New Westminster Secondary School are

able to visit the Legislature, so it's a particular pleasure to welcome

55 of them today with their teacher, Mr. Morris Knight, and two other

adults.

[ Page 6772 ]

might note that although there is a lively debate in this House, there

is also a lively debate in one of our committees of the House, the

Public Accounts Committee, just down the hall. If any of the members

want to come and join us there, that's where I am going as a member of

that committee, and they're welcome at that session as well.

MR. CLARK : The minister hasn't allayed my concerns, because what he is saying is not in the bill.

Interjection.

MR. CLARK :

Well, you know, your comments regarding assistance in marketing, market

research or travel.... None of that is delineated in the bill in any

way. The bill is a broad one which allows you, it seems to me, to give

specific subsidies to specific firms. The minister would have to

concede that the bill allows that, whether or not it's contemplated.

Will the minister agree that that is allowed under this section?

HON. J. JANSEN :

The intention of the Crown corporation is to promote export, not to

ensure that we are going to be in violation of GATT principles or GATT

rights or the free trade agreement obligations. Obviously, when we are

drafting this legislation or interpreting legislation, we would not do

such a thing as to attract that kind of attention. It's very clear that

it is the thrust of the corporation to responsibly address both those

trade relationships.

MR. CLARK : Any grant, of

course, that goes to assisting a company with market research, if it is

market research which presumably would have been or should have been

done anyway by the company, indirectly affects the price of that

product and therefore is a subsidy. I don't know how you can cut it any

other way.

Perhaps we could deal with loans, though,

because the minister is saying that grants are to deal with marketing,

market research, travel and the like, and are presumably therefore

quite small and aren't directly a subsidy. They'd have to take that

extra step which I've just done. But the loans clearly are. The

minister can clarify that for me. A loan seems to me to be a loan

specifically to enhance or to support manufacturing in British Columbia

for export; therefore presumably it's a loan that the government of

British Columbia will give that could not be given in the private

sector for whatever reason — as an assistance to a company to

export. I wonder how the minister gets around GATT provisions or free

trade provisions in that regard when it comes to the loan question.

HON. MR. VANDER ZALM : Before the minister answers, perhaps I could — also for clarification — give

my understanding of this particular section. As I read

section 3(a),

it says: "Make grants to an export enterprise to facilitate the export

and sale of its goods or services." It is not to assist in producing a

product at a lesser price, not to build buildings or to create branch

offices or anything of that nature; instead, it is to facilitate export.

is the intent, as I see it — Mr. Minister, you can clarify this

further and it will certainly assist all of us in that regard —

to make it possible for small industries to get into the export

business. There are a lot of good services and products with small

businesses that do not have the expertise or that initial resource to

tap a foreign market. This is to assist strictly in that process, not

to assist in some way to produce a cheaper product, not to build a

building or to purchase a machine. Obviously if that were the reason,

it would be GATT-able, and it would be contrary to the free trade.

Instead, it is to assist or to facilitate the development of export

opportunities for small businesses especially.

[3:45]

MR. CLARK :

To the Premier. I think it's a fine distinction between facilitate and

assist directly. I'll accept that explanation with respect to the

grants. Maybe the minister — or the Premier, who seems to be keenly interested in this, and that's useful —

could deal with the loan question. The loan question does appear to be

a loan specifically to a company to enable them, presumably, to lower

the price of their product for export abroad. Is that a distinction?

HON. J. JANSEN :

No, again, it's the whole question of subsidization. It is not the

intention of the Trade Corporation to subsidize. If we're talking about

loans, we could talk about loan subsidies. In other words, would we put

in place a loan at 4 percent when the going rate is prime plus two, or

whatever it's going to be on the marketplace. It is our intention to

work with lending institutions and provide guarantees at a fee. It is

our intention that those loan rates not be subsidized. In fact, we

would anticipate the client would deal directly with the bank in these

commercial transactions.

We would not be in a loan subsidy

situation. As such, it wouldn't be looked upon as being in

contravention of GATT, because, in fact, we do not subsidize.

MR. CLARK :

It seems to me that unless there's some attractiveness in the terms of

the loan, one would suggest they might go to the private lending

institution rather than to government. What's the assistance here? Why

would you compete with the private sector to provide loans when the

private sector can surely provide them? I don't understand. Unless

there's something attractive, some hidden subsidy somewhere, why be

involved in this business that presumably the private sector is doing

quite capably at the moment?

HON. J. JANSEN : We

covered this before. The reason the Trade Development Corporation is

involved is to fill those areas that currently the private sector does

not meet. We're talking about pre-order financing, export opportunity,

equity financing. We're

[ Page 6773 ]

talking

about those things that currently are not covered by the private

sector. Again, we see our role not as replacing the private sector but

as working with the number of organizations that are involved from a

federal standpoint and also very much keenly interested in ensuring

that export opportunities are achieved.

It's a

complementary type of process, not replacing the lending institutions,

not replacing the federal institutions that are interested, but really

providing that middle ground: the ability to help all of them put a

package together that will enable the exporter to export. I've dealt

with them in private practice, and those that have any association with

the lending institutions will know the most difficult part. You can

have a letter of credit in hand or you can have some order in hand, but

you have to get that financing in place that enables you to meet the

order before it becomes a receivable or before it becomes inventory.

It's really the difficult period.

That's where I'd see the

corporation being involved in this initial period when you have an

order in hand or a letter of credit in hand but are unable to process

the order because you simply don't have the working capital or you

don't have the financing in place that enables you to achieve that

before the order is finally received.

MR. CLARK :

What the minister is saying is that the banks and the credit unions are

not today doing an adequate job in terms of financing these kinds of

export businesses. Is that what the minister is saying?

HON. J. JANSEN :

The reason the corporation has been structured is to assist the small

and medium-sized companies. If you are a company with sufficient

collateral, you can put that collateral at risk, or put that collateral

forward, to achieve financing for some of your new exporting ventures.

If, because you're developing your company and it's in a developmental

mode, you're unable to put forward that equity position or put forward

that working capital, because of needs through the rest of your

organization, yes, the financial institutions cannot — will not,

in many cases — put forward that type of financing structure.

That's where I would see the corporation being involved.

MR. CLARK : So the answer is yes. Then I agree, for what it's worth to the minister.

Perhaps

we could deal briefly with another aspect of this subsidy or assistance

or facilitation or whatever you want to call it: equity financing. Does

the minister contemplate using this corporation to take an equity

position in companies, to assist them with further financing, say, from

the private sector or the like?

HON. J. JANSEN : Mr.

Chairman, if the member is talking about our taking an ownership

position or taking a security position of equity, I'm not sure what his

question is coming around to.

MR. CLARK : Either one.

HON. J. JANSEN : Both of them, he says now.

The

act obviously enables the corporation to take an equity position if it

wishes to do so. I would be very reluctant to take an equity position,

again because I think the corporation's mandate is not to be an owner

of business, or not to be an operator of business, but is there to

provide guarantees and assistance in terms of export. I would not see

that as happening.

MR. CLARK : Can the minister point to where in the bill it enables the Crown to take an equity position?

HON. J. JANSEN :

Section 4 (2) (c): "to provide financing by way of loans to or purchase of shares...."

Section 3 approved.

section 4.

MR. MILLER :

I resisted the temptation to get up on

section 3 to ask some questions

in terms of the Crown stepping in with a Crown corporation. Obviously

it's at variance with, and some would say contradictory to, current

government policy, which has relied heavily on areas such as

privatization, having the private sector fill these positions. I

perhaps more appropriately should have asked that under

section 3. It

does strike me as somewhat strange that the government is taking this

role of an active participant in the marketplace. It points to either a

deficiency in the private sector or a desire on the part of government

to be more active in the private sector. Perhaps the minister would

comment on that.

HON. J. JANSEN : Mr. Chairman, the

opposite is true. What has happened is that the marketing arm of the

ministry has now fallen within the Crown corporation, as far as

international trade is concerned. It is not there as a trading company

but as a trade facilitator. In other words, we see our role really as

providing assistance and coordination and not in an active way. I've

answered that question before about taking equity positions. We don't

see our way as being actively involved in the running of business. I'm

very much cognizant of the criticism that could happen as a result. Our

role is very clearly trade facilitation.

MR. MILLER :

What you're saying is that we want to use the public's money, and use

it for stimulating export business through a variety of means; as

section 3 says, through making grants, through lending money, through

the guarantee and payment of a loan or the interest. In other words,

we're taking the taxpayers' money and becoming involved in an area of

business. Presumably — I'll restate it — it's because the private sector does not fill that role. That

[ Page 6774 ]

would

be, I presume, the only reason why the government would want to take

the taxpayers' money and lend it and make grants with it and guarantee

the payment of loans with it and forgive interest payments with it.

It's the taxpayers' money you're dealing with. It seems highly

contradictory, given the statements that have been made for the last

few years, in terms of the political emphasis that the government has.

strikes me that if you're going to get involved in the game, maybe you

should be. If you've taken the first step — that is, to set up a Crown

corporation to use the taxpayers' money — you then say you want to

limit yourself. You say: "We don't want to become active participants.

We don't want to take equity positions. All we want to do is loan or

give away the taxpayers' money." There have been all kinds of schemes

floated by many governments in Canada that have had that premise, and

most of them have lost the taxpayers' money. The taxpayer has

shouldered the burden, and if companies go under, well, that's the way

things are and there go our tax dollars.

MR. CLARK : The Attorney-General (Hon. S.D. Smith) agrees with you.

MR. MILLER : My colleague the second member for Vancouver East tells me the Attorney-General is nodding and agreeing.

would seem to me much more prudent, if you're going to become involved,

to get in a little deeper. You've already put your foot in the water;

you might have to go up to your waist. That always has some negative

consequences, depending on how deep and cold it is.

I'd

like to hear from the minister on that point, because as I pointed out,

I think correctly, in second reading, there are many inhibiting factors

in terms of export, not the least of which might be the corporate

structure that runs our primary industries. I'm speaking particularly

of forestry. I think it's been detailed adequately by a number of

fairly objective sources that both concentration and control from

outside the province have been inhibiting factors in adding value to

our primary resources. For instance, the level of meaningful research

and development done in Canada and British Columbia in forestry is

virtually negligible. As a province blessed with enormous wealth in the

form of natural resources, how do we get beyond the primary stage of

making pulp and cutting dimensional lumber and into where we really

have to go, given the constraints on our forest base — into the

manufacture of products with a much higher value? What does the

corporation intend to do in terms of playing some role with regard to

that situation? Is the corporation prepared to undertake some decent

research on that subject in British Columbia, particularly as it

pertains to the forest industry? I see in clause (

e) that you can "act

as agent for and provide assistance to the government in the

administration or implementation of government programs...."

Does

the corporation intend to play a meaningful role in analyzing the

situation we find ourselves in in British Columbia with respect to

corporate structure and with respect to inhibiting factors on research

and development, or are you simply going to sit back and wait for the

submissions to come in and make the best decision you think you can

make in terms of lending, granting or guaranteeing? If it's the latter,

if you're just going to sit in a room periodically and say, "Yes, this

looks like a good prospect; we'll lend or give them a certain amount of

money," I don't think it's going to work.

If the

conditions are there in the private sector, it seems to me that we

would be doing more value-added work. Why isn't it being done now? It's

a logical question to ask, given the size of our natural resource.

Are

you going to dig a little deeper, or is it just going to be another

scheme whereby the taxpayers' money is used to fill a void created by

the private sector?

HON. J. JANSEN : Obviously the

member missed my eloquent speech the other day when I introduced second

reading. It was a great speech in terms of what the corporation was all

about.

[4:00]

The approach is a very proactive one. Its approach in the natural

resource sector the member is talking about, as a value-added wood

product section.... We anticipate that we would talk to those in the

industry, find out what market niches we can explore together, and work

through the COMDP, COFI and other organizations — if you want to take

that as an example — who identify export opportunities. That's the

proactive side. From a reactive side, when a company, for example in

Prince Rupert, says, "We have an opportunity here to export product X

or product Y, and in order to do that we need some assistance on what

the market is like, what the custom clearance is like, what we should

be doing or not doing, and the experience of others of a similar nature

in our sector," we would have the database that would enable the

exporter to make a decision. We would also have people in the Trade

Development Corporation who would be able to say: "Here is a program

from EDC, CIDA" — or whatever it is —"and here is how we can meld that

program with providing new direction in terms of exploring that market."

It's

a very hands-on type of approach, but a facilitating approach. Our

focus is not to become involved and not to tell business how to run

business; we are really there in a facilitating role. There are two

aspects, as indicated: the proactive and the reactive. I would see very

significant strides being made in both those directions.

MR. MILLER : Maybe I can ask a series of short questions. It might be easier.

it the minister's intention under the corporation to do any kind of

analysis of the subjects I have talked about, in terms of the corporate

structure and

[ Page 6775 ]

the lack of research and development, and to make specific recommendations on that subject?

HON. J. JANSEN :

It gets back to what our role is. Our role is one of trade development,

not industry development. I don't see our role as getting involved in

industry and finding out the underlying problems of that industry, and

what should or should not be done from a government standpoint. That

really relates to individual ministries or to areas Regional

Development would cover. Ours is a trade-related function: to promote,

encourage and facilitate trade.

MR. MILLER : Is the minister saying there's a wall between industry development and trade development?

HON. J. JANSEN :

No, I am not saying that at all. There is no wall. I see our mandate as

being clear and focused. If we wished to talk about all the other

problems, then I would have to have a much larger corporation covering

quite a number of areas that I'm not sure government is even skilled

enough to speak about, let alone address.

As I've said

before, the industry groups themselves can talk about and deal with

issues that are unique to their sectors. I would hope we would take

that information and relate it to trade development, but not so much as

it's the province of the industry Obviously there is a communication

link, but our primary mandate is one of trade development.

MR. MILLER :

Has the minister read the federal booklets I made reference to in my

speech on second reading? Have you read the latest Deloitte Haskins

Sells analysis of the deficiencies, particularly deficiencies in

research and development in the forest industry? Have you had a chance

to be apprised of the recent federal study of the long-term development

of the forest industry? Is the minister aware of the deficiencies in

research and development? Is the minister aware that there is a

connection between that kind of activity and success on the export

market; that you don't just sit back and wait for cute little ideas to

come along; that there needs to be a whole host and range of other

programs undertaken by industry in order to get to the point where you

are successful?

Are we just going to have 30 people doling

out some $11 million of the taxpayers' money, or are you really going

to get in and do some meaningful work to assist this province in

getting to where it should be in terms of adding value to its natural

resources?

MR. RABBITT : Mr. Chairman, I ask leave to make an introduction.

Leave granted.

[Mr. Rogers in the chair.]

MR. RABBITT : It's my pleasure today to introduce to the House 20 students from grades 10, 11 and 12 at Boston

Bar Secondary, some teachers and a representative from Fletcher

Challenge, which is hosting the class to Victoria to visit the

Legislature. With this class is a special grade 12 student, Miss Dawn

Davidson, who was chosen from the Hope district to visit China last

year and had a very enjoyable time there. The class that is here today

also visited Trenton, Nova Scotia on an exchange program and will be

hosting that particular class in our beautiful province in the near

future.

I would like to introduce the principal, Miss Joyce

Rebb, teachers Kai Lerche, Geordie Webber and Mrs. Debora Dillon. The

Fletcher Challenge rep is Mrs. Heather Campbell. Would the House please

give these students and the adults accompanying them a very warm

welcome.

HON. J. JANSEN : The question asked about

policy matters or the industry sector concerns regarding the policies

that exist for their industries, and how the corporation saw its role.

As I said before, our role is.... Where those polices impact on export

or import, are trade-related, certainly we would have concerns. But if

it's a sector — for example, the forestry sector — that has a general

industry concern, that would probably be dealt with through the Forests

ministry. If the corporation had a concern in terms of how some

policies relate to the free trade agreement, GATT or export

opportunities, that would be dealt with from a different perspective.

Our

role is to facilitate trade, and where general industry concerns

relate to that, by all means we would have some impact. But I'm not

suggesting that we would speak for the entire sector and deal with all

of the policy problems and industry concerns, because it's not industry

development we're concerned about; it's trade development.

MR. MILLER :

I think you're going to have trouble.... Okay, so once you're up and

running.... We have this hypothetical company in Prince Rupert. You've

got your corporation and your board — whatever. Somebody has an idea,

and they submit it directly to the corporation. Is that how the process

is going to work? Maybe the minister could advise on that.

HON. J. JANSEN :

We would have a sector officer, a director of that sector — natural

resources being one of those.... He would speak to that director, and

we would be able to advise him how much we could assist him in that

Prince Rupert company wishing to export its product. He would utilize

as well, to make sure.... We talked about the concern we had about

continuity of interest. If there were trade policy questions or

questions about market conditions through our overseas offices, that

would all be integrated through the corporation and the ministry. The

entrepreneur would come forward with his idea and his product, and we

would provide technical, financial and any counselling service the

company felt it needed to get that product on line.

[ Page 6776 ]

MR. MILLER :

So in the final analysis, the company in Prince Rupert — we're using

this as a hypothetical case — would not have to go, then, to the

Regional Development minister to get approval for any loans, grants or

guarantees.

HON. J. JANSEN : The primary

consideration is that the buck stops here. If there were other

ministries or programs involved, we would coordinate those to ensure

that the person didn't have to deal first with this Trade Development

Corporation and then with Regional Development or anything else. We

would coordinate the programs that Regional Development had, to ensure

that the client got all the programs available to him that we were

aware of and all the assistance available to make his product

marketable.

MR. MILLER : I listened very carefully to

that answer, and I don't know what it meant. The minister could try

again, I guess, or maybe I could rephrase my question.

HON. J. JANSEN :

The question was: how are we going to ensure that the client company —

and we're using the example of Prince Rupert — has access to the

regional programs? What I said was that the director — maybe I'll be a

little clearer — or the officer assigned to that particular company

would ensure in making the contact that all of the available programs,

be they Regional Development, CIDA, EDC, Canadian Commercial

Corporation or whatever, were available to the client customer. He

would be the person ensuring that all of this information was available

and was passed through the various ministries; he would be the contact

person, or mainly the contact person.

MR. MILLER :

What particular regional development programs exist that mirror

anything you're proposing in the bill? The question I asked is about a

company, an entrepreneur in Prince Rupert, who perhaps wants to

manufacture some value-added product out of wood. Presumably he or she

would go the corporation, because that's the purpose of the

corporation. That's why we're debating this bill.

The

government feels that it's necessary to set the corporation up, because

there is a void right now Those programs don't exist. So my question

was pretty straightforward. The individual would have to deal with the

corporation, and I asked whether that individual would have to get

loan, grant or guarantee approvals to go through the regional

development minister for that particular region. I got a pretty fuzzy

answer back.

[4:15]

Are people going to be able to deal directly with the corporation or

not? If the corporation feels that their idea is worthwhile, that the

product they're proposing is worthwhile and that they need some

assistance to get to marketing stage or whatever else in the area of

expertise of the corporation, do they then have to be funnelled off

through some regional development minister who has to give the stamp of

approval before the corporation can act?

HON. J. JANSEN :

Mr. Chairman, I'm not sure how many times I have to answer the same

question. I've said that we would ensure the client is made aware of

the regional programs applicable to the company. We would ensure that

the client is not required to go from one ministry to the other to have

access to those programs, and that we would act as the legs and the

coordinating point to ensure those programs are addressed. Whether it's

seed capital or whatever the program is, we would ensure that the

client is informed of those programs and make them available to him.

MR. GABELMANN :

Let me ask a related question. Perhaps it's not just related; maybe

it's the same question in a different way. At the present time, if you

apply for a lotteries grant, you have to go to the lotteries minister

to get approval. But you don't get the grant until the regional

minister has said yes to the grant.

When you apply for a

loan guarantee or for some other assistance that's provided in this

legislation, and you go through all the hoops, will the final approval

be delayed by the corporation until after the regional minister has

said yes or no to this particular application?

HON. J. JANSEN :

When we're dealing with programs that are the responsibility of the

Crown corporation, it is the Crown corporation's decision. When we're

dealing with programs through EDC, Regional Development or any of

those, obviously it's their decision. I said that we would ensure that

the process is followed, and that our person would coordinate those

applications.

If a regional program — for example, the seed

capital program — were to apply to a client, we would ensure that the

person responsible for the seed capital program was brought into the

application process, and that the programs were funnelled through that

particular client. But that would be the decision of Regional

Development, of course, given that it's a regional development program.

MR. MILLER :

I want to be certain of this so I can advise my constituents, once

you're up and rolling, of what they have to do. They can get confused

right now. I often use the services of the Federal Business Development

Bank people in Terrace who have managed to computerize every known

grant, loan and guarantee known to any government in British Columbia

or Canada, so they can actually plug in requests to their computer and

provide some fairly specific advice to people interested in getting

into business. There is a plethora — and there has been — and I'm hoping

this isn't just one more in the long line of those kinds of programs.

Obviously,

I don't want people in my constituency to have to go through political

screening in order to avail themselves of the assistance offered by the

[ Page 6777 ]

Trade

Development Corporation. The only program that I know of is seed

capital. There is no other regional program in terms of assistance to

business that I'm aware of; that's it.

HON. J. JANSEN : You brought it up.

MR. MILLER :

No, you brought it up. I didn't mention it; you did. If you had given

me a straightforward answer to start with, we might have actually

passed this clause by now. Sometimes the length of time it takes to

pass a clause is in direct ratio to the clearness of the answers, Mr.

Minister.

A client would not have to go through a political

screening in order to tap into the services — the funding — that may be

offered by the corporation; it's just business?

HON. J. JANSEN : I'm not sure that question deserves the dignity of an answer.

MR. CHAIRMAN : Order, please. Perhaps the members would respect the order and address the Chair with their comments.

HON. J. JANSEN :

As I said before, I'm not sure that question deserves the dignity of an

answer. Obviously that's not the case. It is a trade development

corporation, and its board of directors is a private directorship in

the private sector. I don't know why the question would be asked in

such a way as to determine that the only way you get assistance is if

you have some political connections.

MR. GABELMANN :

On some days, that would be enough to keep us going for the rest of the

afternoon, but we'll let that go — other than to say that the question

is fair and appropriate because almost every activity of government now

requires that people out there have to go through political screening

before they can receive the benefits of government programs. Given the

direction of the political screening as established by the regional

ministries, it's entirely a fair question to be asked.

Continuing

section 4, I want to ask a question that might help to clarify just

what this corporation intends to do. A few years ago, the British

Columbia government assisted Cominco with the amount of some $50

million equity for some modernizing activity that they wanted to

undertake. This was designed to ensure their viability to be able to

export their product. Would

section 4(2)(

c) be used for the kind of

share arrangement that was made with Cominco a few years ago? Is that

the kind of activity envisioned?

HON. J. JANSEN : Not

specifically. I think Cominco's initiative was to modernize their

facility. As I said before, I do not envision the corporation becoming

an equity owner through the purchase of shares However, it's also fair

to say that the assistance to industry to enable export is provided in

a general way in terms of legislation. It's very difficult for us to

predict precisely what type of interest is generated for the company to

address as far as policies are concerned. The answer to your question

is no, the intention is to deal with that type of initiative through

the legislation.

MR. GABELMANN : It's not the

intention to deal with that kind of initiative in respect of an equity

arrangement that the government took, or because of the large number of

dollars involved, or because that's being a significant player in the

economy? For what reason would the government not participate in

something like that?

HON. J. JANSEN : The intention

of the trade assistance of the corporation is project-related, in other

words, dealing with a project for export of a specific nature. It would

not be the intention of the corporation to assist in the general

modernization of a facility to enable trade to happen; there are other

programs available. As I said before, our mandate and role is, number

one, marketing; and number two, having programs that assist in

exporting a particular product, opportunity or service, and it's

related to that product that we really have the assistance programs in

place. It's quite a bit different from what you're talking about. Our

focus by virtue of addressing the needs in our economy is on the small

to medium-sized companies, not the very large ones which would have

access to different programs and opportunities.

MR. MILLER :

I have a great deal of difficulty at this point. I've tried to canvass

what I think are some very important issues in terms of developing the

economy in this province and some of the constraints I see. I have not

been assured by anything the minister has had to say with respect to

the Trade Development Corporation that we're really going to get into

that in any meaningful way.

I was a bit offended by the

minister's last response to my question, that he wasn't certain it

should be dignified with an answer. I won't say the same thing. I see

no accountability; I see just another boondoggle here of throwing a

bunch of tax money into a corporation that doesn't seem to have very

well-defined terms of reference. The minister hasn't been able to

articulate that clearly — at least to me — or how it's going to benefit

development in British Columbia in some of our key sectors. We've got a

ballooning board and an opportunity for a boondoggle.

didn't start out feeling that way about the bill. I registered my

concerns under second reading, and I thought they were pretty valid.

But, I'll tell you, I've certainly changed my mind since then. I think

the taxpayers' dollars may not be well used by throwing them into this

kind of weakly defined.... You know, the terms of reference of the bill

— what the minister is proposing to do — are weak. The minister hasn't

been able to explain to this House what particularly they intend to do.

I think we're just going to see some tax money go down the drain. A lot

of people take trips around the world, but very few benefits come

[ Page 6778 ]

back to the citizens of this province, who are out there working and paying the taxes for the money that you're going to use.

Sections 4 to 6 inclusive approved.

section 7.

MR. GABELMANN :

Section 7 is the borrowing powers section. Unlike the B.C. Hydro

legislation, it doesn't say how much. May I ask the minister how much?

HON. J. JANSEN :

The amount is zero. The only way the corporation can borrow is through

the minister, with the authority of the Minister of Finance. So it's

quite a bit different than some of the other Crown corporations. We

have no borrowing authority until it's given to us by the Minister of

Finance at such time as we need it.

MR. GABELMANN :

Other legislation requires approval by the Legislature. As I understand

it, the corporation could go to the Minister of Finance, ask for X

number of dollars, have the minister's approval, and then the board

could go out and borrow that much money. Is that right?

[4:30]

HON. J. JANSEN :

I assume the member is referring to the Minister of Finance. The

Minister of Finance would have to — within guidelines, of course;

Treasury Board and cabinet.... As far as the corporation is concerned,

it draws its authority through the current executive council delegation

of responsibility.

MR. GABELMANN : I understand that.

I understand also that the borrowing the corporation would embark upon

would be borrowing from the government, as it were. The government

would provide the funds; but if the government isn't flush that day,

they would have to borrow the money, and I understand the Minister of

Finance would borrow the money. But what limitations are there? I can

find none in the legislation about how much that could balloon to at

some day, should the Minister of Finance and Treasury Board and cabinet

be in a good mood.

HON. J. JANSEN : Mr. Chairman,

that's a good question. There isn't that upwards limit. Obviously, the

limits are those that the executive council would enable. Through the

criteria of the Financial Administration Act and the powers of the

auditor-general, those would all be reviewed. The question is a valid

one: there isn't an upwards cap in legislation.

MR. GABELMANN :

Mr. Chairman, there are two concerns. One is that there isn't an upper

level; and, secondly, there is no public accounting. There will be a

public record but no accountability process, which you have in the

Legislature. Every time B.C. Hydro wants to spend yet more money, they

come to the Legislature for a debate about whether or not

we should grant them another $500 million so they can build another dam

or whatever it is they want to do. That process will not happen under

this legislation. I have to register a strong expression of concern

about both those issues: the fact that there are not specific dollars

mentioned, and the fact that there isn't an accountability process

through this Legislature.

Having said that — we could spend

the next hour having a philosophical debate about that, and that's not

my intention — I would like to get some idea about what thinking is

going on within for the planning of this legislation. How much money

are we talking about the corporation needing in this borrowing section?

Are we talking about a few million dollars, tens of millions of

dollars, hundreds of millions of dollars? What are we talking about in

terms of this?

HON. J. JANSEN : The accountability, I

guess, is talking about the reporting concerns the member has. The

accountability is that because we are borrowing from government, if the

corporation were to borrow, it would be reflected in the quarterly

reports that show the transaction taking place. At that point it would

be a public document and a matter for public record.

It's

difficult to answer the question as to what I would see the upper limit

to be. As I said before, we want to be flexible in reacting to

programs. We have an export financing guarantee program whose drawdown

in terms of those guarantees which will be covered through the

estimates.... Any other programs are as a result of direction by the

board and approval by the executive council. It's difficult for me to

say it is going to be $1 million, $2 million, $5 million or $10

million. Having said that, I don't see that the drawdown of borrowing

will be that significant. It will be minor — except for the export

financing guarantee program, which will be covered through a separate

announcement and covered through the estimates.

Sections 7 and 8 approved.

section 9.

MR. CLARK :

Looking at some other acts in respect to

section 9, "Financial

administration," I draw the minister's attention.... I'll just canvass

a couple.

In the Ferry Corporation Act, for example, it's a

similar section, eight or nine clauses. In the bill we are dealing

with, subsection (5) says: "The corporation shall prepare for the

minister, after the end of the fiscal year of the corporation. . . ."

In the Ferry Corporation Act, instead we have: "The minister shall lay

before the Legislative Assembly annually..." and then similar

provisions. In other words, we have exactly the same wording in the

Ferry Corporation Act, but in this bill it says it goes to the

minister, and in the Ferry Corporation Act it says it goes to the

Legislative Assembly.

[ Page 6779 ]

B.C.

Buildings Corporation Act, exactly the same: nine subsections. In this

bill before us we have eight; identical wording for the first four. But

in subsection (5) in this current bill it says, "shall prepare for the

minister," and in the B.C. Buildings Corporation Act it says: "The

minister shall lay before the Legislative Assembly...."

Likewise

in the B.C. Transit Act; a very similar financial administration

clause. In this case it says: "The authority shall prepare for the

minister as soon as possible . . . ." Later it says: "...shall be laid

before the Legislative Assembly...."

Those are three

examples of almost identical sections where it says that the financial

statements of the corporation will be laid before the assembly. Yet

this one says it shall go to the minister. I wonder if the minister

could give us some rationale for that.

HON. J. JANSEN : The intention is that having received that report, I would file it with the Legislature.

MR. CLARK :

Perhaps I will just get the minister to confirm that. You are saying

that even though it is not in the bill — there appears to be a standard

clause in every other Crown corporation act — you are going to follow

it?

HON. J. JANSEN : The concern is that the

financial administration of the corporation be made public. First of

all, the corporation must have a firm of auditors report on it and

report on the statements. As a normal course of operation, those

statements would become public. In the final analysis, what the member

is speaking about will happen; upon receiving the report the minister

would file it in the House in the normal way.

MR. GABELMANN :

I just cannot understand why that provision is not included in this

legislation. The minister has not given us a reason. Does it hamper his

ability to have the corporation conduct its affairs? What possible

reason could there be for not having a requirement that the report and

the financial statement be tabled? What possible reason is there for

not having that in the act?

HON. J. JANSEN : The

filing of the report with the minister would normally ensure that the

minister responsible for the corporation would also file it in the

House, given that the financial information act applies to the

corporation and the internal auditor will have some interest in the

corporation. The end result is the same: that the report will be tabled

in the House as a normal ministry report.

MR. GABELMANN :

There are still reports on shelves somewhere in this province that have

gathered dust over decades because ministers have chosen not to file

them with either the House or the public, given what the report might

say, or given some fear.

I'd like to move an amendment, Mr.

Chairman, on this particular point. It would be a new subsection 9(9),

and it would read as follows: "The minister shall lay the report and

the financial statement before the Legislature if it is then in

session, and, if it is not then in session, within 15 days of the

opening of the next session."

MR. CHAIRMAN : Thank you. One moment please while we just have a look at this.

The

amendment appears to be in order. Would the minister wish to respond to

this amendment? I'll have a copy run off for him if that's all right.

On the amendment.

HON. J. JANSEN :

Mr. Chairman, I can't accept the amendment. The requirement through the

Financial Information Act requires that where a member of the public

wishes information they can request it. It is the intention that the

corporation — because the minister is chairman, certainly — will file

in the normal way. So I don't see any need to insert that requirement

section 9.

MR. CLARK : This is scandalous. The

minister maybe could correct me if I'm wrong, but this appears to be

the only Crown corporation in British Columbia that does not have to

make an annual report to this Legislature. Is that correct?

HON. J. JANSEN :

I can't answer that question, obviously, save to respond to the

concerns of the B.C. Trade Development Corporation. I indicated that as

part of my report to the Legislature I would report on the B.C. Trade

Development Corporation.

MR. CLARK : The minister is

saying that he's going to report anyway. Why won't you accept this

amendment? It is simply not acceptable to say that a member of the

public can go and look at the financial statements. You can't say both

things. On the one hand, you're saying, "It's public information and

anybody can go and look at it, and I'm going to table it anyway," and

then on the other hand you're saying, "Well, we can't put this in the

bill, because there may be some secret dealings or some financial

information that shouldn't be made public." It's either one or the

other, and if it's the former, then the minister should have no problem

agreeing with this amendment.

It's simply not acceptable to

bring in a bill which, we've already canvassed, has all kinds of broad

generalities and loopholes, but then to say on top of all of that that

we don't have to provide any financial statement to this chamber, and

it's not in this bill. I think it's the only Crown corporation in

British Columbia that does not have to file an annual report and lay it

before the Legislative Assembly of British Columbia.

I'd

like the minister to try to give us at least some pretence of defence

as to why there doesn't need to be an annual report laid before this

House.

[ Page 6780 ]

MR. CHAIRMAN : Shall the amendment pass?

MR. WILLIAMS :

You've got to give some explanation, Mr. Minister, for not accepting

this kind of reasonable amendment. This is to simply deposit with this

Legislature and report formally to the Legislature for this instrument.

You

have no borrowing power limitation whatsoever in this statute. It's

virtually unprecedented in terms of a blank-cheque request for a rookie

cabinet minister who has been quite unable to answer any of the most

reasonable questions in the world this afternoon and now can't even

deal with something as simple as filing a report with the Legislature.

The level of incompetence in this administration.... To come from

Public Accounts Committee, seeing the mess in scaling and revenues for

royalty, and then to come into this chamber and see a request for a

blank cheque for a rookie minister in a whole new agency of government,

and then to have them say: "No, we won't file with the Legislature...."

How much rope do you want, Mr. Minister?

MR. KEMPF :

I wasn't going to get into this debate, but when I hear an amendment

such as this brought forward in this House and then turned down by this

minister, I know there's a contempt by the Premier of this province for

the democratic process. I don't have to wonder about that. I only have

to wonder about what the minister of state does in my own constituency.

I know there's a contempt for the democratic process. I know there's a

wish on behalf of the Premier....

[4:45]

MR. CHAIRMAN :

Order, please. Mr. Member, please take your seat. We're discussing an

amendment put forward by the member for North Island (Mr. Gabelmann).

I'm afraid you're going to have to make your comments relevant just to

this amendment at this time on this bill, and this amendment is pretty

specific. If you'd like a copy, I will have one sent down to you. I

think we'd like to deal with just the amendment at this time. Please

continue.

MR. KEMPF : Mr. Chairman, I'll do