1998/99 Legislative Session: 3rd Session, 36th 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 31, 1999

Afternoon

Volume 15, Number 14

[ Page 12943 ]

The House met at 2:08 p.m.

Prayers.

I. Chong: Today I would like to pay tribute in this assembly to a former constituent of mine. Mark Scott was a resident of Oak Bay, and he was known in this local community for his sense of community responsibility. To that end, he actively participated in many local organizations. He volunteered and served on many boards and commissions, and he basically did a majority of the local fundraising for the social services that we need in this community. Mark Scott passed away on Friday while on a much-deserved vacation.

I know the community of Oak Bay-Gordon Head will dearly miss him, as will the greater Victoria area. I would ask you, hon. Speaker, to send a letter to his wife and family on our behalf and express our condolences.

[1410]

Hon. A. Petter: On behalf of the government benches, I too share in the tremendous sorrow and loss that this community feels as a result of the passing of Mark Scott. Mark Scott exemplified the spirit of community in all that he did. He was a major contributor to all facets of life in this community. He will be sorely missed, although I think he will never be forgotten and his contribution will live on. Certainly if you could express to his family our condolences to them and our appreciation for the work that he did on our behalf, I think that would be more than appropriate.

The Speaker: Thank you, members. I'd be happy to do that on your behalf.

J. Weisgerber: In the precinct today is a group from Portland State University. They are a public administration grad class, and they are here to examine and understand better the workings of their neighbours in British Columbia. Please don't disappoint them in question period.

C. Hansen: In the gallery this afternoon are two very good friends of my constituency assistant who are visiting from London, England. They are Nilakshi Banerjee and Tom Stacey. Will the House please make them welcome.

B. Goodacre: In the building today we have a group of young people visiting from St. Joseph's School in Smithers. I'd like the House to please make them welcome.

Oral Questions

ACCESS FOR SMALL CONTRACTORS TO HIGHWAYS WORK

G. Abbott: The Highways minister keeps saying that the NDP's union-preferred HCL agreement for the upgrade of the Trans-Canada Highway was meant to help local contractors and residents. However, right now there are 30 contractors in the Shuswap area who are being shut out of work because their workers don't belong to the right union. If HCL is all about local hire, will the Transportation minister tell us why these 30 local Shuswap contractors won't get work on the Trans-Canada Highway upgrade?

Hon. H. Lali: In answer to the question from the hon. member on the HCL local-hire model for Cache Creek to the Height of the Rockies, this is a small contract that's been let out. It's just the beginning. There'll be more contracts coming up in the future. As we ramp down the spending on the Vancouver Island Highway, we'll be increasing the spending on projects on Cache Creek to the Height of the Rockies. There'll be ample work available for anybody within a 100-kilometre radius of contracts that are let on Cache Creek to the Height of the Rockies.

I also want to point out that 92 percent of the workers on the Vancouver Island Highway project were from within the local areas of the Vancouver Island Highway.

The Speaker: First supplementary, the member for Shuswap.

G. Abbott: The minister's words will be cold comfort to Lindsay Blackburn and his non-union crew in Salmon Arm. Mr. Blackburn has been providing service out of Salmon Arm to the Ministry of Highways for about 30 years. The minister's HCL office called the other day and told him that they would hire one piece of his equipment, but they wouldn't hire any of his workers. Will the Minister of Transportation and Highways tell Lindsay Blackburn why, after 30 years of local service, the ministry will hire his equipment but they won't hire his local workers?

[1415]

Hon. H. Lali: I wish the hon. member across the way would quit misleading the public. He knows full well that both union and non-union contractors are eligible to participate in HCL projects. I also want to point out that on the Vancouver Island Highway, 60 percent of the contracts were awarded to non-union firms, and 50 percent of the workers hired had previous union membership.

Interjection.

Hon. H. Lali: The hon. member across the way knows full well that local hire means that people from the local areas would be hired. What are the hon. member and the Liberal Party across the way saying -- that we should be hiring Alberta firms and Alberta workers to work on B.C. projects?

R. Thorpe: Jim Zappone and his brother had been contractors in the Salmon Arm area for 35 years, employing up to 28 people. Jim used to have seniority on the ministry's hired-equipment list, but now, thanks to the NDP's discriminatory HCL list, Mr. Zapponi has been bumped to the back of the list because he's non-union. Will the minister tell Jim Zapponi why he and his Salmon Arm workers are being shut out of work on this highway upgrade?

Hon. H. Lali: The hon. member across the way knows full well that all those workers who want a job in those local areas have to do is apply with HCL, because HCL is the employer. The hon. member knows that, and for the hon. member to play politics with these very important issues . . . . He also knows full well that we have equity hiring on HCL projects. For the first time, you've got people from visible minority groups -- people with disabilities, people from aboriginal groups, as well as women -- who for the first time are getting work on HCL projects -- which was not there before.

[ Page 12944 ]

The Speaker: Minister, finish your answer, please -- quickly.

Hon. H. Lali: I would like to ask the hon. member: what's the hon. member saying -- that we should have no HCL and have people from Alberta coming to work on HCL projects?

The Speaker: First supplementary, the member for Okanagan-Penticton.

R. Thorpe: Thirty contractors and more than 150 local residents recently met in Salmon Arm to protest the NDP's discriminatory HCL policy. This policy is hurting local contractors, local employees and taxpayers. Will the minister explain why he is soaking B.C. taxpayers for millions more in higher costs for his discriminatory HCL policy?

Hon. H. Lali: I also want to point out to the hon. member across the way that there were 17 HCL contracts for day labour and equipment in the Sicamous-Revelstoke area. And of those that were dispatched, half were to non-union firms.

Interjections.

The Speaker: Members . . . .

Hon. H. Lali: The hon. member across the way also knows full well that HCL is discriminatory against Alberta workers and in favour of local workers from British Columbia.

A. Sanders: A month ago this minister told us that HCL was going to help our local contractors. Now we see that . . .

Interjections.

The Speaker: Order, members.

A. Sanders: . . . in fact he's given them the bum's rush. He's in fact driving independent contractors out of business. To the Highways minister: why is the minister intent on imposing policy that discriminates against local contractors? Why is he intent on implementing job-killing plans? And will he stand today and tell the people in my area that he will scrap this ridiculous policy?

Hon. H. Lali: When that party there sat in this House as government, when they were under the name of the Social Credit Party, they discriminated against workers who were from a visible-minority background. It was those people who in 1992, when we introduced equity legislation in this House, voted to a person against equity hiring and equity provisions -- those people across the way. And when those people sat as Socreds, they discriminated against aboriginal hire, and they also discriminated against women getting jobs on these kinds of projects.

[1420]

The Speaker: Thank you, minister.

Hon. H. Lali: It's high time they recognized . . .

The Speaker: Minister . . . .

Hon. H. Lali: . . . that people from all of these ethnic backgrounds . . .

The Speaker: Minister . . . .

Hon. H. Lali: . . . deserve jobs on these projects as much as anybody else.

The Speaker: First supplementary, the member for Okanagan-Vernon.

A. Sanders: The only discriminating going on is by the Highways minister against independent contractors in my area.

This government bragged about its support for small business, and it's precisely small business that's being affected by this particular policy. These are the ones being shut out by government's discriminatory action towards them. All these contractors want is an opportunity to have . . .

Interjections.

The Speaker: Order, members.

A. Sanders: . . . government contracts on an equal basis.

Interjections.

The Speaker: Members, come to order, please. It's difficult to hear the question with all the noise.

A. Sanders: To the Minister of Highways: for the benefit of people in the areas we've been talking about, could you please tell us why you are so intent . . .

The Speaker: Through the Chair.

A. Sanders: . . . on bringing in policy that puts small business people out of business? Why are you intent on . . .

The Speaker: Through the Chair, hon. member.

A. Sanders: . . . taking away their jobs? And could you please tell those people . . . ?

The Speaker: Through the Chair, hon. member.

A. Sanders: Could you please tell those people, hon. Chair . . . ?

The Speaker: Hon. member, through the Chair. All I heard was "you." Through the Chair, hon. member.

Interjections.

The Speaker: Order, please.

Interjections.

The Speaker: We need to hear the question.

[ Page 12945 ]

A. Sanders: Thank you, hon. Chair. To the Highways minister: could you please tell the people in my area how -- through the Chair -- taking away their jobs is a benefit and a help to small business?

Hon. H. Lali: It may be news to the B.C. Liberals, but family-supporting wages are not a bargaining chip in this bidding process. If the hon. member and any one of the Liberals across the way . . . .

Interjections.

The Speaker: Members, members.

Hon. H. Lali: If the hon. member who just asked the question and any one of the Liberals would like, we can arrange a private briefing for these hon. members, because they sure don't understand HCL. I say shame on the Liberals, who are again advocating for Alberta workers to be working on B.C. projects. Any contractor, no matter where they are in Canada, is allowed to bid on these projects, and the hon. member should know that.

I think the hon. member should also know that for the first time, we've got people working on Highways projects under the HCL model who are from within British Columbia; 92 percent of the workers on the Island Highway project were from Vancouver Island. If they had bothered to check, all municipalities on Vancouver Island supported the Vancouver Island Highway project with this local-hire provision.

S. Hawkins: If this minister had the guts, he'd go to Sicamous, he'd meet with those private contractors, and he'd listen to their concerns. But he hasn't done that. This minister knows -- and he should know -- that it's only getting worse and worse for contractors who won't toe the NDP line.

Now we hear that the twinning of the John Hart Bridge in Prince George . . .

Interjections.

The Speaker: Order, members.

S. Hawkins: . . . will also be done only by HCL. That is shameful. Will the Minister of Highways tell local contractors in Prince George, whose workers don't belong to the right union or don't belong to any union at all, whether or not they too will be consigned to the bottom of the list?

Hon. H. Lali: If that hon. member has any guts, I'd like her to go to Prince George and tell the people of Prince George that they should not have local hire on the John Hart Bridge. If that hon. member has any guts or if any one of those Liberals has any guts, I want them to go out to any one of the communities on the Vancouver Island Highway project and tell those people that they don't deserve to work on the Vancouver Island Highway project.

Interjections.

The Speaker: Order, members.

[1425]

Hon. H. Lali: They should also realize that this is not something new. This was something that was done by W.A.C. Bennett when they were building dams in this province and opening up the interior and the north. This is something that has been borrowed from 30 years before. If any one of those Liberals has any guts, they should go to those local communities and tell those local people that they shouldn't be hired on those projects.

The Speaker: First supplementary, the member for Okanagan West.

S. Hawkins: It is local workers and local contractors that are affected here. Why doesn't it get through this minister's head? It's unbelievable. Who do you think is meeting with us? It's not people from Alberta who are coming and meeting with us. It's people from our local communities that we're talking about.

Now we see that the Minister of Highways is quoted as saying that local hire and equity hire will be the priority in the Aspen Grove-Merritt upgrade of the Coquihalla. This sounds an awful lot like HCL all over again. I want to know if this minister will be honest enough with the local contractors in his own area who don't belong to the right union -- whether he'll tell them that they're out of luck and they'll soon be out of work.

Interjections.

The Speaker: Order, members.

Hon. H. Lali: On this side of the House, we're . . .

Interjections.

The Speaker: Members, members.

Hon. H. Lali: . . . proud of the fact that we've got equity hire as a part of the provisions of HCL.

I want that hon. member who just asked the questions to go to any community where there are Indo-Canadians and tell those Indo-Canadians that they should not be allowed to work on these kinds of projects. I'd like that hon. member to say that, or to go to the aboriginal communities and say that they should not be allowed to work on HCL projects, because that party over there, across the way . . . . We know that they discriminate against aboriginal people and ethnic minorities. We know that, because they voted against the equity legislation that this government brought in, in 1992. To a person, they voted against it.

M. de Jong: Only this minister could take this House to new lows, as we've just seen.

Interjections.

The Speaker: Members, come to order.

Interjections.

The Speaker: Members, members.

Interjections.

[ Page 12946 ]

The Speaker: Members, come to order. We're nearly finished question period, and I want to get the last question in. The member for Matsqui has been recognized and has the floor.

Interjections.

The Speaker: Will the members on the government side please come to order.

M. de Jong: This is not about local hire, Madam Speaker. This is about a government that is so desperate to shore up disappearing support amongst the one constituency that they think they might be able to buy off. It's not even about joining a union; it's about joining the right union.

Why doesn't the minister stand up today, cut the charade, cut the games and admit to British Columbians that this is a desperate attempt by an NDP government to do a favour for the big unions and, in the process, kill the small business people that have put this province on the map in the first place?

Interjections.

The Speaker: Order, members.

Hon. H. Lali: If the member wants to talk about lows, he still hasn't apologized for the slanderous comments he made to Herb Dhaliwal. He still hasn't done that. We're still waiting for him to apologize.

Interjections.

The Speaker: Minister, members . . . .

Hon. H. Lali: Speaking of lows . . .

The Speaker: Minister . . . .

Hon. H. Lali: . . . this Liberal Party still hasn't paid back the $800,000 . . .

The Speaker: Minister, on the question.

Hon. H. Lali: . . . they owe to the B.C. taxpayers -- the money they stole for their partisan advertisement.

The Speaker: The Minister of Transportation and Highways will come to order. On the question.

Hon. H. Lali: Hon. Speaker, if the hon. member across the way wants to talk about charades, the charade that he had when he went to India in order to tell his local Indo-Canadian supporters that he went to the Anandpur celebrations . . .

The Speaker: The minister will take his seat.

Hon. H. Lali: . . . when he wasn't even there on the 12th -- the day the international dignitaries were invited to . . . .

[1430]

The Speaker: Minister, come to order. The minister will take his seat.

The bell ends question period.

Interjections.

The Speaker: All members, come to order.

The Chair is happy to entertain any debate that is to happen on the floor, but one needs to stand up and be recognized.

Tabling Documents

The Speaker: I have the honour to table two documents: public report No. 39 of the ombudsman, "The Silver Creek Fire Review," pursuant to

section 31(3) of the Ombudsman Act; and the opinion of the conflict-of-interest commissioner in the matter of an application by the member for Port Moody-Burnaby Mountain with respect to alleged contravention of provisions of the Members' Conflict of Interest Act by the member for Esquimalt-Metchosin.

Orders of the Day

Hon. J. MacPhail: In this chamber, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry Responsible for the Public Service and the Ministry of Transportation and Highways. In Committee A, I call Committee of Supply. We'll be debating the estimates of the Ministry of Aboriginal Affairs.

The House in Committee of Supply B; W. Hartley in the chair.

ESTIMATES: MINISTRY RESPONSIBLE FOR THE PUBLIC SERVICE

(continued)

On vote 54: Public Service Employee Relations Commission, $12,891,000 (continued).

R. Coleman: I understand that right now we're going to spend a few minutes on BCBC. First of all, before I get into BCBC in any length . . . . I've been dealing with this corporation for three years, and I've had a good working relationship with this particular company as a Crown corporation. So today I don't want to spend a great deal of time on its business plans or what have you, because I've been briefed over the last year on a regular basis relative to the business plans and the operation of the corporation. I do have some concerns about the corporation, though, and I'd like to bring them to the minister's attention.

In 1997-98, this corporation paid a $20 million dividend to government, and in 1998-99 it was able to pay a $2 million dividend to government. It's now being asked, in 1999-2000, to provide a targeted dividend of $246 million. I have some concerns about that. If I look at the balance sheet of the corporation, the real estate assets and investments of the corporation actually total about $977 million, and the liabilities of the corporation are about $800 million. The retained earnings are $186 million, and the contributed surpluses to the corporation are $52 million. I'm concerned, hon. minister, frankly, about where the $246 million that is targeted as a dividend is going to come from.

[1435]

[ Page 12947 ]

Hon. M. Sihota: Thanks, hon. member, for your question and your comments about the corporation. I know you have been the critic and know well of the corporation and speak well of it, as I do. It's a very well-run corporation.

It's going to be a challenge. We'll have to see how the year unfolds, in terms of our ability to meet the target set by the Ministry of Finance. As you know, in some years Crowns exceed those expectations, and in others they fall short of them. We'll just have to watch what happens through the course of the year. But we're working on a plan, and we'll see how it unfolds.

R. Coleman: Maybe, just as we look at that, you know . . . . If we have a corporation that doesn't have $246 million in net assets, I have a couple of questions. First of all, are the real estate assets of the corporation devalued from what their true market value is? And what is their true market value, if that is the case? And if that isn't the case, have we taken into account in your calculations for the 1999-2000 year -- when we start to, obviously, sell off some of these assets to get some money -- the drop in the real estate market that's taken place, particularly in the commercial sector, in the last 14 to 16 months?

Hon. M. Sihota: Yeah, it's a book value, not a market value. Obviously as market conditions change and/or improve, the extent of the realization to the capital gains can be enhanced.

R. Coleman: Does the corporation today have, then, a sense of what the market value of its assets is?

Hon. M. Sihota: Well, $1.5 billion.

R. Coleman: And that $1.5 billion which is in the asset value . . . . Do we include in there the value of B.C. Place Stadium or any other non-performing assets? How much in non-performing assets do we have in that $1.5 billion?

Hon. M. Sihota: I was just checking this question with staff, because it wasn't clear from your answer . . . . First of all, B.C. Place is not included; I'm aware of that. But if by non-performing asset you mean land, then yes, there are landholdings within the portfolio of BCBC. In that context the answer is that there would be some non-performing assets, and I'm referring there to land.

R. Coleman: Maybe the question should be rephrased then -- rather than non-performing assets, non-marketable assets. We do have assets within the corporation that, frankly, are not that marketable because of their revenue stream and the uses of the properties throughout the province. If they're included in the $1.5 billion . . . . I'd like to get a sense of the value of those types of assets that are in that $1.5 billion.

Hon. M. Sihota: No, I would say that it's all marketable. There are going to be some assets which the private sector may not want to acquire -- like a jail. But even with that, we're seeing in other jurisdictions that those are marketable and have been marketed in other jurisdictions. No, they're all marketable.

R. Coleman: The plan for BCBC, currently, is to look at the process of reviewing its portfolio and to prepare a plan for the disposal of properties. It has always concerned me that you dispose of assets -- assets that have been acquired at a lower value and that have a value to the taxpayer -- in order to meet something such as a dividend target. That could be short-term thinking. If the corporation managed to give us a $2 million dividend in the year 1998-99 -- when we were actually moving out a lot of government assets, because we were having . . . .

I don't know if the minister's aware -- but I'm sure that he is -- that if a ministry decides to shut down an office, within six months BCBC gets the asset back and has to find a new tenant, whether it be in the marketplace or within government. During that period of time, they still managed to turn a $2 million dividend to government.

My concern is that we're going to either borrow $246 million against the asset stream or dispose of our better-performing assets in order to achieve the maximum return on the money and to pay this $246 million dividend. In so doing, we'll actually hamstring the corporation for its future, either for a higher debt load -- which at $246 million would be somewhere around $18 million worth of interest, even at today's interest rates, and which, if you look at the revenue stream of the corporation, could be very damaging to its long-term future . . . .

If you devolve yourself of the performing assets and end up with a non-performing asset, you put the corporation in a worse position than actually borrowing the funds, because you have no revenue stream coming in.

I'm just wondering what the minister's discussions have been with the corporation in that regard.

[1440]

Hon. M. Sihota: Thank you, hon. member, for the question.

Actually, the discussion has been similar to what the member has raised. These are concerns that all members should have. BCBC is a Crown that one would not want to jeopardize, in terms of its viability -- and not to undermine the quality and the level of services that it provides, both from a fiscal point of view and otherwise. Clearly, in trying to meet these objectives, we're going to have to juggle all of those considerations and arrive at a determination. But I think the underlying tenor of what the member is saying about maintaining the integrity of the corporation is one that is shared by this side of the House and obviously with the members opposite.

R. Coleman: I don't think that the minister is in a position to go back to the Ministry of Finance and stand up for the long-term health of this corporation, rather than to basically suck $240 million out of it in a short period of time -- which would be a short-term objective for long-term damage to the corporation.

Hon. M. Sihota: Obviously all the ministers have a collegial and positive working relationship. Sometimes, if targets cannot be met or objectives secured, we have a dialogue about that. At the same time, we set targets for ourselves that we challenge the public administration system in the province to try to meet. I've never been reluctant to go back and talk to a minister -- a colleague -- when we're not able to achieve our objectives. At the same time, you know, you always want to go and talk to a member when you are exceeding your targets. But we're going to try to do this in a somewhat thoughtful,

[ Page 12948 ]

prudent and managed way without, as I said at the outset, dealing with the integrity of the corporation. So as I said in my opening comments, we'll monitor progress as the year goes on.

R. Coleman: The corporation has a number of objectives in its business priorities. The objectives lead towards reducing costs of occupancy to government. I'm just wondering if the corporation could answer -- through the minister -- on the number of objectives it has in its corporate business priorities for 1999-2000. Were these corporate business priorities put in place prior to the requirement for the $246 million dividend?

And if that's the case, how does that dividend now affect the ability of the corporation to meet the priority goals, such the million dollars towards the corporate goal of reducing accommodation costs for government by $30 million? Also, the cost of how they are going to get their base lines and achieve the other cost reductions that they've outlined in those priorities if they're going to be spending their time on the dividend pay-out . . . .

I'm just wondering how the corporation itself feels about those priorities today compared to what the priorities were prior to the Ministry of Finance's budget wanting to have the dividend.

Hon. M. Sihota: The parameters that the member referred to at the outset of his question were developed before the new instructions from Treasury Board. So they predate those instructions. Obviously they'll have to be amended to take into account the new objectives that the government has laid out. At the same time, there's a million dollars' worth of savings -- relatively modest -- that were referred to. Over the last three years I think there was somewhere in the neighbourhood of $39 million worth of savings that had been returned to the taxpayer -- again, evidence of a very well run Crown.

So yes, they predate. Yes, there will have to be amendments as we move through. No, we're not going to undermine the integrity of the corporation.

[1445]

R. Coleman: Through the minister, maybe I could ask the corporation for an update of those corporate business priorities for 1999-2000 versus the ones that I got as a result of the briefing, because obviously they're going to be adjusted according to this dividend requirement -- if that wouldn't be too difficult.

The other thing is that the corporation has a relationship to Victoria through the Victoria accord, and I'm just wondering how the Victoria accord, which began a number of years ago . . . . It was a ten-year plan, with a $200 million cap, for a development program in the Victoria area. I'm just wondering how this reduction in dividend is going to affect the time frame of that accord or whether it has any effect on the Victoria accord's business plan.

Hon. M. Sihota: The Victoria accord was a plan that was predicated on certain assumptions. Those assumptions have been altered in the sense that the civil service is not growing at the rate that the accord envisioned. There have been reductions in the size of government, and as a consequence -- as I said at the outset, plans constantly change -- part of the evolutionary process here has meant that we've had to revisit some of the assumptions that we made then.

We have to go back to the city . . . . We are indeed in discussions with the city about elements of the accord. There are certain lots -- properties, for example -- that we have here in these precincts, which may not be developed as fast. They may indeed be surplus and hence available for disposition. They may be more eligible for public-private partnerships than one had originally envisioned under the terms of the accord. So I would say that it's an evolving process, because the market impacts on so many of these variables as you work your way through a document like the accord.

R. Coleman: Maybe the minister could just give a sense to the House, then, of what percentage of the accord has been completed and how much of it is outstanding.

Hon. M. Sihota: I don't think that's a fair question. I think it's more fair to point out the fact that the dynamics in the market have changed a fair bit, and I think government's desire in terms of proceeding in as vigorous a fashion have also been impacted because of what has happened in the market and also because the decision to downscale part of it. Given those determinations, there are, however, still things that we'd like to do with the city here in Victoria.

We obviously have some work to do, and we are indeed in dialogue with the city on what we do with Belleville Street properties, for example. I think that was part of the initial plan. There has been some ongoing dialogue about Ship's Point -- a very controversial piece of property with quite a notorious history here in Victoria -- and we will continue to try to work out something there. So to some extent, I guess, in that regard, there is ongoing work. Other Crowns may also have an interest in some of these properties for their own needs.

Generally speaking, I would say that I wouldn't want to quantify whether we're at a two out of ten or a five out of ten on the accord. I think it's fair to say that a lot of the underlying assumptions have changed, and I don't foresee us moving in a way that would . . . .

The other point I'd make to the hon. member is that I am worried a little bit about the impact on the private sector market. Obviously we have people in the private sector who've made investments in building stock here in the greater Victoria area, and I do worry about the impact of an aggressive public construction program on private sector holdings. I mean, I think it's only fair to expect people to make a reasonable rate of return on what they have, and if we were to withdraw space from the marketplace, I'm not sure that that would be the best in terms of building relations between the province and the local business community.

[1450]

R. Coleman: Maybe it'd be just as simple to ask if the minister would instruct BCBC to give me an updated briefing on the Victoria accord, and we can go from there.

I was reading some old documents last night, and I came across this. This is why I asked the question about B.C. Place Stadium earlier. At one time, it appeared that this was actually booked on the books of BCBC as an asset at approximately $150 million net of depreciation and that it was being run by the B.C. Pavilion Corporation. Could the minister tell me -- or could BCBC tell me -- where the asset is now booked as an asset?

Hon. M. Sihota: It's with the B.C. Pavilion Corporation.

[ Page 12949 ]

R. Coleman: I think the discussion that I needed to discuss has been done. I think that basically, for me, it comes down to . . . . If you take $246 million out of this corporation, how are you going to do it, and what assets are you going to divest yourself of? If you do that -- if you divest the interest -- my concern is that you weaken the corporation to the point that it won't be able to perform on its business priorities for government, long-term. As a result of that, it would be some short-term medicine for a long-term pain.

I would urge the minister to go back to Treasury Board, or back to the Ministry of Finance, as they go through their priorities for this corporation and about taking the asset apart. Sometimes you can take too much of an asset apart, and then what you're left with is something that will not function as the team that it has been for some time. I would caution you on doing that. If you do that, then you will end up with something that not saleable, operational or profitable. I just caution the minister on that.

Hon. M. Sihota: I want to thank the hon. member for those points, and I want to comfort him in this sense: we're not out to sell off the silverware. We're not going to do that. I want him to understand that the very concerns that he's mindful of are the ones that I'm mindful of, so we're not going to do anything that is simply, in my view, short-term gain that undercuts what we have here. It's a very well-run corporation.

Vote 54 approved.

ESTIMATES: MINISTRY OF TRANSPORTATION AND HIGHWAYS

On vote 44: ministry operations, $462,849,000.

[1455]

Hon. H. Lali: It's a pleasure to be here today to discuss the work of the B.C. Transportation Financing Authority and also the Ministry of Transportation and Highways. I want to offer just a few brief highlights of our plans for the coming year. I look forward to answering members' questions, starting in a few minutes.

The past year was a busy one in the Highways portfolio and for me personally as well. I was lucky to have several opportunities to get out of Victoria and into several of the regions to talk to people about transportation. From Fort St. John and the Peace River country up in the north, through the interior and the East and West Kootenays and also on Vancouver Island and in the Vancouver suburbs, I was constantly impressed at the knowledge that British Columbians have about transportation issues. The citizens of this province are very much aware of the role that transportation must play in any government plan to create jobs, stimulate business and support communities.

During the coming year, the BCTFA and the ministry will take on a very ambitious program of highway improvements, offering benefits to all regions. The BCTFA will invest $490 million in a highways capital program this year. That's about $110 million more than last year. Much of that will go to rehabilitate and upgrade secondary roads and secondary highways. Our intention is to support the diversification of regional economies -- oil and gas in the Peace, agrifood in the interior, tourism and service industries across the province.

[1500]

The government's regional economic summits have helped us define our priorities. We have now hosted four regional events in Prince George, Kamloops, Castlegar and the Cariboo. Many other proposals for our current workplan have come from local councils and business groups. We have increased our investment levels this year in the north, in the Kootenays and also in the interior.

In northern B.C., we are in the second year of a northern roads initiative. We doubled our capital investment in the north in 1998, and we plan to provide another slight increase in the coming year. This is a program that supports side roads and secondary roads around the north, as well as our major highways such as Highway 16 and Highway 97.

One special highlight for the north is the launch of the seven-year program to upgrade the Nis g a'a Highway. In the Kootenays, I would single out our plan to construct the new Kootenay Lake ferry in the Nelson area. This has been welcomed as very good news by all interested in that community. Our long-term focus in the interior is on the Trans-Canada Highway corridor from Cache Creek to the Height of the Rockies, and we are making a number of significant improvements this year. We are in the first stages of developing a long-term investment plan for that particular corridor, but it will be a few months before I can offer details.

In the lower mainland, we have recently launched several high-profile projects. I recently had the pleasure of signing a contract to begin the rehabilitation of the Lions Gate Bridge. We will also begin work on new interchanges in Surrey and Langley; these are two innovative partnership projects of the BCTFA, which will utilize proceeds from land sales to reduce costs to taxpayers. Work on the design of a new airport connector is moving ahead in partnership between the BCTFA and YVR -- the Vancouver Airport. We will soon begin seismic upgrading on the Port Mann Bridge, and we'll add a fifth lane to the bridge starting this fall.

This summer, we will start work to provide improved access to the Trans-Canada Highway at the Cape Horn interchange, just west of the bridge. The Vancouver Island Highway will be the scene of very intense activity over the summer, with a new

section from Mud Bay to Courtenay opening in the fall. Construction work on the new fully four-lane, Courtenay-to-Campbell-River

section is already underway.

Along with the highways, we continue to plan for the future. Corridor and area studies are ongoing along Highway 97 from Cache Creek to Mackenzie, in the central Okanagan on Highway 11 and along the Trans-Canada Highway corridor in greater Vancouver. The past year has seen the growth of an increasing number of partnerships with local governments and the private sector. The BCTFA has joint investments with Surrey, Mission and Castlegar on highway interchanges, while my ministry has partnerships with towns such as Quesnel and Vanderhoof to address local traffic issues and highway access issues in a phased and cost-effective way.

Starting this year we have a new partner in the lower mainland -- the Greater Vancouver Transportation Authority, the GVTA -- which will now be responsible for more than 700 kilometres of former provincial highways, for three bridges and also for the Albion ferry. The GVTA is now developing its long-term strategy for greater Vancouver, and I am confident that its regional perspective will help resolve many of the key transportation issues in our largest urban area. It is important to note that the province continues to retain responsibility for the provincial highway network in the lower mainland.

The Ministry of Transportation and Highways estimates that it will invest $312 million this year in payments to mainte-

[ Page 12950 ]

nance contractors. The balance of the ministry's $462 million budget supports a wide variety of activities, including the supervision of maintenance contracts, the operation of inland ferries, avalanche control, traffic signal operations, centre-line painting and many other items. The office of the superintendent of motor vehicles is now entering its second full year. The superintendent's office is responsible for setting standards with regard to the medical fitness of drivers and with regard to dangerous drivers.

We are currently engaged in discussions with the other provinces and the federal government on the need for a national transportation investment strategy. Canada is the only major industrial country where the federal government is not leading a major program of infrastructure renewal. We hope that Ottawa will agree to a program of long-term transportation funding starting next year.

[1505]

This is a challenging and fascinating portfolio, and it is one where I am in the happy position of helping to create jobs and opportunities for British Columbians in communities throughout the province. I'm proud of the program we have laid out for this year, and I will be pleased to answer questions from members.

Before I turn the floor over to my hon. critic, I'd like to introduce staff. To my left is Blair Redlin, who's the deputy minister and also president and CEO of BCTFA. Sharon Moysey is the executive director of management services. David Marr . . . .

Interjection.

Hon. H. Lali: Okay, he's actually up in the gallery; he'll join us later. He's the executive director of evaluation and monitoring. Frank Blasetti, to my right, is the senior vice-president of project development. Also, John Doyle is up in the gallery; he's the director of communications and will be joining us later.

D. Symons: One thing that the minister and I will agree on is the importance of highways in the province of British Columbia. That is something that I think we can all agree upon. It provides for our commerce in the province and provides for the comfort of people and the enjoyment of the roads, and we must look after the infrastructure.

I guess there are a few things that have happened, though, over the years, in the way that the highways have been treated that I'd like to discuss first before we lead into the actual questions. Back in what I'll refer to as the good old days of W.A.C. Bennett and the growth of the province during the postwar years, our highways saw phenomenal growth. That was what really opened up the province of British Columbia to much of the success we've had financially since that time.

However, they had an advantage at that time that we don't have, and that was that the growth in the province was quite phenomenal, and the money was there to do much of what they did at that time. We have seen not-so-good times in the last few years, and certainly that has put more constraints on our ability to emulate what was done back in the fifties and sixties in this province.

Something else we've seen, though, that's taken place over that time, as well, is the way that we fund the roads that we're building in the province. During the years I referred to a moment ago, and up until the election of this particular government, all the highways capital projects and expenses for highways were paid out of that year's allotment to the Ministry of Transportation and Highways. It was all budgeted for in the budget books. It all came out of the consolidated revenue fund, and we accounted for it under that particular accounting procedure -- in the Legislature in questions, and for keeping the books.

What we did see happen in '93, I believe, was the introduction of a bill -- the Build BC Act -- that had a portion in it that set up an organization called the TFA, as referred to by the minister earlier -- the Transportation Financing Authority. Basically what the Transportation Financing Authority allowed the government to do was to take capital projects -- and, as we've seen more recently, other projects -- and move them off the ledger of the usual ministry expenses and put them into a Crown corporation and really debt-finance much of the highways work in the province of British Columbia.

So what we've seen happen over the years since the introduction of the Transportation Financing Authority -- through '94 and '95 and up until this year, '99 -- is more and more of the expenses of the Highways ministry move from an expense of the ministry over to a debt financing in the Transportation Financing Authority. This year it's roughly a 50-50 split between the ministry and the Transportation Financing Authority in the moneys being spent on highways, used for highways, in the province of British Columbia.

Now, that may seem good, but I think . . . . I will say in defence of what was done that there are situations where you do need long-term financing. You have to have a reasonable degree of certainty for a project such as the Island Highway, which is ongoing, can't be built in a year or two, has to be built over a period of years. You do need the certainty that the funding will be there.

Under the old system, basically, it was whatever the Minister of Finance of that particular year felt could be allocated out of the overall expense of the province for the Highways ministry, and then they had to work with that sum only. Now at least there's a continuing source, through some dedicated funding and other things, to promote or at least to lever money to build the highways that are needed.

But I think what we're getting to is a stage now where the amount of money that has been borrowed over these years is going to create some problems in future years, and we find that the interest that we're going to be paying on that, and the debt we've run up, may produce some problems in years to come. I'll spend some time later on speaking of that.

If we look at the role and the mandate of this Transportation Financing Authority, we find that in that act it says: " . . . to plan, acquire, construct, improve or cause to be constructed or improved transportation infrastructure throughout British Columbia and to do such other things as the Lieutenant Governor in Council" -- that is, the cabinet -- "may authorize." That is a pretty wide mandate, and it's pretty wide open, too, as to what the government can do under the Transportation Financing Authority. Indeed, they've interpreted and acted under that wideness I've just referred to.

[1510]

As a subpart -- I'm reading from the TFA annual report of a few years ago -- they say under "Financing" that one of the roles of this is "to develop revenue and financing strategies that spread the cost of new projects over their useful life, increase cost recoveries from beneficiaries and minimize the burden on general taxpayers."

[ Page 12951 ]

Now, the only catch with that is in "general taxpayers," because eventually taxpayers, one way or the other, are going to pay for virtually everything that's done. So general taxpayers, I suspect, is meant there as coming out of the consolidated revenue fund. But one way or the other, we are going to pay for it -- be it gas taxes that are dedicated to that, tolls or whatever vehicles might be used. We'll have to do that.

The act also requires that the business plan contain an expenditure proposal. Then it says: " . . . the plan must also include revenue proposals indicating how the expenditures will be funded." The one thing I notice there is that it says "how the expenditures will be funded"; it doesn't necessarily say how the debt is going to be paid down. I'm hoping -- sincerely hoping -- that that was intended in there, even though it's not spelled out that way in the act.

I'd like to start off with a few questions. First I'm asking for some reports. I thought I might do it this way. There are a number of papers I would like to have, if not today, certainly in the next short while. If I could just read off a rather lengthy list of reports, etc., that I'd like to have . . . . And I will -- I see some grimaces over there -- supply them to you in writing later on, if you don't get them. I would like a copy of the BCTFA statement of financial information for the period ending March 31, 1998, and for the fiscal year just ended, at March 31, 1999.

Those statements of financial information would be very handy -- also the BCTFA business plan. I gather, from the one I got, that you're doing these annually and updating the business plan then. So the one dated March 31, 1998, and the business plan, if you have it ready, for March 31, 1999 . . . . I assume you would have it ready for the coming fiscal year that we're now in.

I would also like, if we can, to have a copy of the BCTFA auditor's report for '98-99. That may not be quite ready yet, but I'm sure it's about time that that auditor's report will be coming out. I would also ask, maybe, in a moment -- you can answer this later: does HCL produce annual reports? I have not seen one if HCL does, but I would like the HCL business plan for April 1, 1998, through to March 31, 1999. And if there are any of those annual reports for HCL, then I assume there would also be an auditor's report for HCL. If we could have those . . . .

And I'm wondering: for HCL, are there consolidated balance sheets and that sort of thing done yearly? Maybe you can answer whether those reports are available, and then I will go on to the other questioning.

Hon. H. Lali: I'd like to thank the opposition critic for his comments in his opening remarks. All of the reports that the hon. member mentioned -- I'll have staff forward them to the hon. critic. Also, he asked a question about the HCL financial statement. That's actually consolidated within the BCTFA report, so it's not something that is done separately.

[1515]

The hon. member made a statement about the BCTFA and how it's been set up with long-term financing of the projects under its jurisdiction. I want to point out to the hon. member that the BCTFA is required by law, under the Build BC Act, to be financially sustainable, which means that BCTFA must have a revenue plan to match the expenditures. BCTFA structures its debt portfolio such that borrowings will be fully repaid at the end of an asset's useful life.

As far as his comments about supporting Highways spending, the auditor general actually does not support Highways spending or spending on other long-service infrastructure being expensed as incurred. As a result, the province is capitalizing these assets.

During slower economic times it's precisely the time to actually make greater investments to kick-start the economy, such as we are doing this year. BCTFA is spending $490 million on capital projects to help jump-start the economy in all regions of the province. Three of the regions -- the Kootenays, the north and the interior -- have seen a marked increased in spending over the last couple of years, especially in and around those communities that have been hard hit by the downturn in the forestry sector due to the Asian financial crisis.

All BCTFA data is fully consolidated within government's financial management plan and reviewed annually. Highways, our fiscal assets . . . . One can define the useful life of a highway using debt financing. It's consistent with other assets like buildings, transit, schools, etc.

P. Calendino: I ask leave to make an introduction.

Leave granted.

P. Calendino: I see in the gallery a good friend, a former president of the British Columbia Teachers Federation and a fellow teacher at North Delta Secondary School. She is here with a number of students, I believe, observing this wonderful debate and learning how the parliamentary process works in B.C. I would ask the members to make them all welcome. She's Alice McQuade, former president of the B.C. Teachers Federation.

D. Symons: I would add my welcome to Alice McQuade. I was involved with the BCTF annual general meetings and frequently would see her doing her work -- very well -- at the federation.

Just carrying on now, I wonder if the minister might give me a feeling for any changes in the management structure that have taken place in the TFA over the last year -- any organizational changes or personnel changes of significance that might have taken place.

Hon. H. Lali: We've completed an efficiency review and actually removed one of the vice-presidents' positions from the BCTFA. Doug Hibbins, who was the senior vice-president, has gone outside of the TFA. He's replaced by Frank Blasetti as the senior vice-president of project development.

D. Symons: I'd like to get the minister's comments straight. He said he'd removed a position and replaced . . . so it means that the one individual now is doing the two jobs. Or have you kept the same number of people involved, then?

Hon. H. Lali: We have one less person working with us now. The workload of that position is spread over the other three.

[1520]

D. Symons: I wonder if the minister might give me an idea of the total accumulated value of any severance packages that might have taken place in the last year.

Hon. H. Lali: Doug Hibbins left voluntarily. There was no severance. He's in the private sector now.

[ Page 12952 ]

D. Symons: I'd like, then, to move on to some other topics and discuss the debt of the Transportation Financing Authority, because I have an idea that that debt is getting fairly close to the point of being not sustainable. The minister assured us earlier in his comments that indeed everything's fine; it's all part of the debt management plan. But we have seen in this province, over the years since I was elected in 1991, various debt management plans come forth under different guises. I think we're now up to plan four, or something, on the part of the government. Every one of them has never met its goals.

Within a couple of years, they have had to invent a new one and change the goalposts somewhat so that they would be more likely to meet it. They still have yet to do that. So you don't give me any comfort, I guess, by saying that somehow it's all taken care of. It's all part of the way the debt of the province is going to be held. I have concerns about the debt of the province, let alone the fact that we have a very large debt growing in the Transportation Financing Authority.

I wonder if you might be able to tell me, then, the TFA's accumulated debt as of March 31, 1997, '98 and then up to the last fiscal year, '99. I just want to see how the debt is accumulating, please, over that three-year period.

Hon. H. Lali: Before I answer the question on the debt, I want to go back to the previous question. I just want to clarify something. Mr. Doug Hibbins was an excellent public servant. He had been in the public sector in British Columbia for about 20 years. There was no push factor involved in it at all. It was his desire to move on to bigger and better things. That's why he left for the private sector. I know the hon. member across the way knows that. I just want to clarify this for the record. The viewing audience or somebody reading Hansard might get the wrong idea. Mr.

Doug Hibbins was an excellent public servant and did a remarkable job on behalf of British Columbians for the 20 years that he was involved in the public sector.

Moving on to the question that the hon. member asked on the debt, for 1998 it was $1,101,323,603; for 1999 it will be $1,437,851,177. We don't have the figures here for '97. As soon as we have them, we'll get them over to the hon. member.

D. Symons: Yes, I have that figure. It's somewhere in the neighbourhood of $900 million, I believe.

This year, on March 6, the Transportation Financing Authority announced $490 million of capital earnings, so I guess it would be fair to add the $490 million to the $1.437 billion. I get confused by all the zeros here. But anyway, we've got close, I suspect, now to the $2 billion mark of debt that the Transportation Financing Authority must be holding. I'm wondering if you might be able to give me, then, what you consider the total debt will be at the end of this fiscal year, as an estimate.

Hon. H. Lali: The figure I cited for '99 was the total debt at March 31, 1999 -- $1.437 billion. The other is attached to that. Roughly, the $490 million that the hon. member just mentioned . . . . That figure would be added on, and it would be counted as debt at March 31, 2000.

[1525]

D. Symons: What we're going to get at the end of this fiscal year, then . . . . Next March 31 we'll have about a $1.5 billion debt, roughly.

I'm wondering, then, if you might give me an idea . . . . Over those same years . . . . Now, you said that you didn't have '97 before, so I suspect that you will have it for '98-99. How much debt reduction has taken place? You had a debt of roughly $1.101 billion in '98 and $1.4 billion in '99. That debt is going up. But I'm sure, at the same time, that if we have a debt that's sustainable, there's also some money paying off the principal as well. This principal's growing, mind you, but you're paying off some of the principal from previous debts that you've run up. Can you give me an idea of how much money in each of those two years has gone into paying down the debt?

Hon. H. Lali: We have sinking funds that are set up to pay for the projects throughout their life terms, and we fully expect to have those funds to this top level and have those projects paid off. As at March 31, 1998, the figure was $15,617,379. On March 31, 1999, the sinking fund accumulation was $27,461,863.

D. Symons: So far, then, in those two years the sinking fund has grown somewhere in the neighbourhood of $12 million. As our debt is continuing to increase, of course the money that's going into the sinking fund is going to increase as well. So I'm wondering, then, if you can give me an idea of whether indeed the funding stream that we now have is going to manage to take care of the debt. We seem to be collecting a lot of money. We're spending a lot of money. I'm wondering at what point we're going to find that the 3-cents-a-litre gasoline tax, $1.50-a-day car rental levy . . . .

How long is it going to be before that isn't going to be able to lever more borrowing? We're in a situation now where I believe we're getting to the stage that we're going to hit a debt ceiling fairly soon if we don't have some further forms of income.

Hon. H. Lali: Actually, starting tomorrow -- June 1, 1999 -- the BCTFA will be getting another 1-cent-a-litre fuel tax, to make it 3 cents. It's not a new tax; it's from the existing revenue that's already there. On the issue of the car levy -- the $1.50 a day -- that will be staying the same. There are no plans to change that.

D. Symons: If we look at the fact that you're really financing the highways out of gasoline tax -- which seems appropriate . . . . The vehicles are paying for the highways, so that part seems appropriate. But if you also look at the fact that supposedly . . . . Earlier I read that thing from the TFA when they sent it up about it not coming out of the taxpayer's pocket. If you take money away from general revenue that was there . . . . We've now seen 3 cents a litre for gasoline. There's 4 cents a litre for the GVTA. There's now 1 cent a litre, going to 11/4 cents a litre, for B.C. Ferries.

All that money, then, is coming out of the general revenue and is going to be dedicated. That money out of the general revenue will probably be got somewhere else. One way or another, the taxpayer's going to be filling that void that's there, now that moneys are being dedicated to highways. We're going to have some continuing problems.

I wonder if the minister might just sort of take his crystal ball out and look down the line 20 years from now. If we are to continue on the path we're now on, with our debt going up in the Highways ministry by $300 million a year . . . . There certainly are a large number of capital projects within the province that need doing. But if we run a debt up $300 million a year, year after year, at what point are we going to reach the stage where you say that we can't sustain that debt unless we

[ Page 12953 ]

have a huge increase in some finance? You're putting money into a sinking fund to pay off later on when you think that the highway is used up, that it's reached the end of its useful life. We're going to have problems in dealing with this way of financing highways long before we get to that 20-year period.

[1530]

Hon. H. Lali: There were actually a number of comments and questions in the hon. member's statement. On the dedicated fuel tax, it's actually very, very progressive. We're the only province in the entire country that is dedicating fuel revenues for transportation projects.

In terms of debt reduction and paying off the debt for rehab, it's a 15-year life span, and for capital it's 40 years. The member, I think, made a comment about some of the savings that we've had for our P3 projects, such as the Mission interchange and others. The cost-sharing with beneficiaries is $52.5 million.

On the other issue, the hon. member made a comment about having expenditures of $300 million a year, year after year, and the debt rises. I guess it comes down to a choice of what this government believes in terms of protecting the infrastructure we have in place. Obviously, if you have an infrastructure that is near the end of its life span or is falling apart, it will be a detriment to the economy of the entire province -- such as the safe and efficient movement of goods and people. We have the British Columbia economy, which is heavily dependent on the forest sector and mining industry, as well as on tourism.

Also, for their day-to-day activities, people depend on a safe transportation network in order to access health and educational facilities.

As minister, I believe -- and certainly my cabinet and caucus colleagues believe -- that we need to protect the infrastructure that is in place. Not protecting it or strengthening it or even expanding it would mean that our industry and our economy would suffer in the end, in terms of not having the availability of safe and efficient movement of goods and people around the province -- which actually would act on the bottom line of big and small business.

D. Symons: Yes, agreed. But I guess we have to concern ourselves with what has happened in the past and what is likely to happen in the future. If we take a look at the past . . . . You know, the member was elected at the same time I was, back in 1991, and maybe the member wasn't as cognizant of highways as I was as critic at the time. But certainly what happened in '92 and '93 was basically that the Minister of Highways of the day closed down capital construction in the province of British Columbia.

Any contracts that were let were carried through with -- the contracts had been done. But the intersection of Highway 97 and Highway 3 in the Okanagan was left half done for two years. They didn't finish it off, because they just let the contract go to the point they had gone -- where they had done some preliminary moving of water pipes and things of that sort. The thing was left as an unfinished intersection.

[P. Calendino in the chair.]

The Gibsons bypass was another one where work had been done. It had been done to the stage where it was ready to be blacktopped, and they had left it half finished -- at the gravel stage, at the beginning stages to finish the project. Those two years of a fair amount of rain, and so forth, actually undid some of the work that was done.

It's the same thing with the road up to Parksville, the Island Highway portion that was built. Those projects were left to sit idle for two years, and basically they deteriorated in that time. The overall expense of doing it later on was considerably more. So we find that that was happening.

At the same time, we take a look at the rehabilitation of highways. The minister will get into rehabilitation later on, but I think the minister will agree with me that we have a real deficit in the province in terms of the rehabilitation that needs to be done. We have a lot of highway that's reached its life expectancy to be rehabbed. A lot of highways have passed that point, and we're not catching up on that backlog.

[1535]

What we find, then, is that the rehab was not being done. For a number of years the funding was well below -- below half -- what was needed. We didn't really see any perking up of highway, except for the Island Highway project, which was started in '94 and then really began in '95. That was one major project. But we saw in '95 the whole thing of "Going Places": glossy little magazines and so forth coming out, showing all the wonderful things that the government is going to do for highways, for ferries, for transit -- and we're going to have a wonderful province.

Of course, soon after the election of '96 we put capital projects into a freeze mould, and we waited a few years. Now we're ramping up again, because, lo and behold, we're going to have an election within a year or two. So we find the minister saying that they're doing lots of projects around the province. I agree with him, you are. I won't criticize too many of them, actually. But indeed, we see a cyclical thing going on here. It's tied in more with elections and electioneering than it is to a real commitment to the province of British Columbia, and we're running up a lot of debt in the process of doing it.

I still believe we should be paying for some of this stuff out of current-year money rather than mortgaging the future of our children to pay for our expenses today.

I wonder if I might look at the next topic I want to talk about. I have problems, as I said earlier, with whether we are working in a situation that will be sustainable over a long period of time. I'm also looking at the decisions that have been made in relationship to the projects that are being done, and I'm wondering if the minister might be able to give me some sort of idea of the prioritization of projects.

What process does the ministry, the planning department . . . ? How do you go through the process of laying out which projects . . . ? When you decided to do, for instance, the John Hart Bridge, what processes did you go through to decide, with the limited money we have, that that's one of the projects we need to do this year. How do you determine it? Is it safety? Is it the economic needs of the area? How do you balance all the needs around the province to come up with a prioritized list of projects to be done?

Hon. H. Lali: I'll answer the hon. member's last question first and then go on to the other ones afterward. In terms of the prioritization of projects, it's actually a fairly rigorous process. Members of the travelling public, local communities, municipal mayors and councillors and regional district reps, etc., are all involved in the process, as well as ministry staff,

[ Page 12954 ]

obviously, at the district and regional levels. Also, we look at issues such as the business cases for all these projects. There's some multiple-count evaluation that is done and analyzed by the TFA, collected from all over the province, and priorities are set.

There are also issues of safety of the travelling public on a particular stretch of the highway or a particular bridge, and environmental considerations as well as economic development considerations. For rural areas, this is something that is very important. There are financial considerations, and last but not least, there's also the social aspect of all of this. This is very, very important in rural British Columbia. There's the North Peace Rural Road Task Force that was set up. Two years ago, they produced a document which was actually as thick as this document here.

It was done by volunteer workers, people who represented communities and chambers of commerce, elected officials and people who were in the transport sector. They came back with a report and listed their priority projects, from one to well over 200, I think it was. The ministry had developed its own list, and when we compared the two lists, they virtually matched in terms of the priorities, so we were able to fund those in last year's budget and obviously again in this year's budget.

[1540]

On the issue of the capital projects and the debt that the hon. member has talked about, he says that in '92-93, the province virtually shut down capital projects. I'd like to actually take the hon. member back a few years before that. The Coquihalla Highway was being built by a previous government -- Mr. Vander Zalm and also former Premier Bill Bennett -- during those times, and it was expensed in the year the project was being built. There were some fairly hefty cost overruns, and we found out, actually, that the . . . .

Actually that government -- Bill Vander Zalm's government -- found out that the policy really didn't work. That was after the Coquihalla. It was actually the Socred government that shut down virtually all of the capital projects within the province. Obviously when the NDP came into office, that policy was followed through.

So the member is correct in that regard for '92 and '93, when former Highways minister Art Charbonneau was the minister of the day. That policy was continued on -- what had been there in place before, under the Socreds in the late eighties. It wasn't actually until a few years ago -- I think it was '94-95 -- that spending on capital projects was actually ramped up, and it continues today.

We also have to take a look at another part of this whole equation. I know that the hon. member will agree with me that British Columbia's population has grown by leaps and bounds. We've led the country for almost a decade in terms of the number of people, the population that was growing in British Columbia. We're growing at a rate of almost 100,000 people a year. So, obviously, services had to be provided for a growing population.

I also want to point out that last year the rehabilitation budget for the ministry and the TFA was actually more than doubled from the year before. It was down to less than $70 million in 1997. Last year we jumped it up to $153 million. Almost 50 percent of that actually went up into the northern half of the province. In 1997 the investment in both rehab and capital in the northern part of the province was less than $30 million. That was jumped up to $60 million last year and $69 million this year, in order to live up to our commitment for a multi-year northern roads initiative.

In 1998, BCTFA expended roughly $380 million on capital projects; that was $100 million more than the year before. In this year, the 1999-2000 budget, the BCTFA will be spending $490 million; that's a jump of $210 million from 1997. Obviously job creation is something which is a cornerstone of the investments that we're making, especially in rural areas, where the resource economies in rural areas have been hit harder than other parts of the province because of the Asian downturn, the Asian flu.

D. Symons: I guess the minister tends to forget some things. Indeed, I got involved in politics because of the antics of Mr. Vander Zalm, actually. He was no slouch when it came to building highways, particularly doing it, I suspect, for election purposes. It wasn't -- as the minister suggested -- that they weren't doing anything after the Coquihalla Highway. Certainly that Coquihalla Highway did create real problems. There was pressure to meet a time

schedule that was unrealistic, to have that highway in place for Expo in Vancouver. They were foolishly going ahead, working at night under snow conditions and all the rest. They really blew the budget on it. It reminds me a little bit of the fast ferry program.

We find that, during that period, in the last little bit, the Cassiar connector was built -- a fairly major project, the minister might agree. The Hastings-Barnet Highway in the lower mainland was being built -- also a fairly major project -- as an HOV project along there. The Gibsons bypass was done on the Sunshine Coast.

Indeed, it was the Social Credit government -- whether we care to give them credit for it or not -- that instituted the beginning of the Island Highway project. They did most of the plans and so forth in their time. Your government had the good fortune to be able to carry on and do it -- and do it, I think, in a way that you managed to do it maybe more quickly than would have been done under the previous government, doing it bit by bit as elections came along. That beside the point, we have had that sort of situation in the past.

[1545]

I'm gathering from the minister's answer, then, that each region or district has something. I must say that I've got a copy of that North Peace project they put together. It's a marvellous book. In fact, I suggested to them that they should get the other various regions of the province -- because that's done on an electoral boundaries basis -- and maybe have the highways regions get together, as was done in 1988 with the Delcan study, which was also done under the Social Credit government. They went out to every region of the province.

You can get them in the Legislative Library here -- a copy of the reports that they brought out for each of the highways districts. In there, they looked at the needs of these areas. They involved the public a great deal in prioritizing and identifying those needs. They put out a report so that everybody could see what each of those regions thought were the projects that needed doing, the justification for it and the prioritization of those.

I'm assuming from what the minister said a few minutes ago that something of that sort exists within the TFA or the ministry. I'm wondering if you would be willing to share with the opposition those lists of prioritized projects that are to come in the future.

Hon. H. Lali: Surely the hon. member isn't defending the Socred government of the past. I was just trying to be a little

[ Page 12955 ]

humorous with the hon. member. Obviously some planning work, as the hon. member mentioned, on the Vancouver Island Highway was initially done by a Socred government.

I'd like to just take him back a little bit further. The initial survey done on the Coquihalla Highway was by Dave Barrett's government in 1975. There is always ongoing planning by the ministry, regardless of what party happens to be in power at the time. But planning doesn't stop simply because there's a change in government, whether it's NDP, Socred or whatever.

Obviously, since the BCTFA has come into existence, there has been major investment all throughout the province, in every region of the province, to make sure that we have those investments to jump-start the economy -- especially in this year's budget, with the $490 million that I announced way back in March.

Some of the things that the hon. member is looking for are actually future policy. I mean, the capital plan is reviewed every year, and then, given the finances, certain projects are moved forward. Others are put forward until the next year or years afterwards. The Freedom to Move documents that the hon. member spoke about, which were developed many, many years ago . . . . Obviously there were a lot of good things in there as well as some things that may have been part of a wish list and all that. Certainly the hon. member also knows that not all of those projects or those proposals that were put in there were pushed forward by the Social Credit government of the day.

D. Symons: No, they weren't all. In a sense, that document is still a valuable tool for looking at roads. I use it periodically even today, although it's a decade old now.

What I was asking the minister was: if you've gone through the process, as you told me earlier, of looking at safety issues, economic issues and all the rest to determine projects that need doing around the province and possibly even prioritizing them to a certain extent . . . . I'm not asking for a timetable when each would be done. But if you've gone through that process and you've done due diligence on it, surely there's no reason why those documents couldn't be given to the public so that everybody could see.

If you want input into them to make sure, as you said before for the northern road ones, that the two dovetail very well what the ministry had in mind and what the people in the north decided would be good for their particular area . . . . If they dovetailed, why not release them? If you've got them studied, let's see them.

[1550]

Hon. H. Lali: Obviously the hon. member does understand that in terms of future policy, we can't give you lists of projects that we haven't actually announced, where funding hasn't been made available. But if the member does want a list, we can certainly provide the member with a list of some of the proposals.

D. Symons: I don't think the minister is familiar with the Delcan study. If you'd look at it, you'd see what I'm asking about. It was certainly made public at the time. In fact, the public had a lot of input into it. All we're asking is simply that we can see what projects in other areas are considered projects for doing. I think that would be worthwhile, and then eventually we'll get around . . . . In future years, possibly -- of course, the future is that we'll be on that side, and you'll be on this side -- you can use it back on us and ask a few questions: "What are you doing with this project or that project, and where does this fit into your scheme of plans this year?"

I think that's fair game, because that's basically what the people throughout the province want to know: what do you have in long-term plans, and what do you consider needs doing? They'll give you some input into what you consider and they consider a match. If they do, well and good; if they don't, we've got some problems. If they do match, then the only real problem is: how do we get the funding to get the thing going? That's a big enough problem in itself, but I think it's the first part we should be able to do. So I would love to see that.

You indicated that there are a lot things that go into prioritizing the capital projects. It was a rather fuzzy answer for me to be able to determine if we could end up measuring the decisions you've made, and which projects go ahead, against some sort of criteria. I don't know if you use a point form -- or whatever you use -- in those decisions. You did mention some things that you look at when prioritizing projects. But if we see that project A is being done and that project B isn't being done, how are we going to be able to determine whether you've used a set of fixed guidelines for determining that?

I'm wondering if you might use, in one of the areas -- working on highways -- the idea of traffic counts to determine whether you've got to do some more capacity along the highways. Do you use traffic counts as one of the criteria for determining whether the capacity of a given highway should be increased or not?

Hon. H. Lali: Yes, we do use traffic counts as one of the criteria that the hon. member just asked about. In terms of the information the hon. member is asking for, I'd be more than happy to provide him with the information. It's actually contained in the corridor management plans that we've got and also in the business plan which will be coming forward. The lower mainland corridor management plan has already been announced, and the other ones coming soon are obviously the Okanagan corridor management plan, Highway 97, Highway 11 and also Cache Creek to the Height of the Rockies.

So they will be made available to the hon. member, and most of the information that he's looking for in terms of projects is in there.

D. Symons: Great, and I'll look forward to that.

I'm wondering . . . . I'm not sure if you have traffic counts here with you today.

Interjection.

D. Symons: I'll ask for some. I know I'm not going to get them today, but if you could look them up, I would be interested in the traffic count along Highway 97, somewhere in the Armstrong-to-Sicamous area where I believe it's still a two-lane highway. I would be interested . . . . Also, I believe there's a two-lane

section between Summerland and Peachland on Highway 97. If we could have a daily traffic count and possibly the summer count -- which is going to give you the highest numbers possible, I believe . . . . I would also be interested in the traffic count on Highway 99 between Horseshoe

[ Page 12956 ]

Bay and Whistler. Again, let's do a count in whichever portion of the year will give that daily number the biggest value -- the biggest kick to the number, I suppose.

[1555]

The reason I'm asking that is -- I'm going to ask for another one in a moment -- that last September the minister told the people of the North Island that the traffic count north of Courtenay did not justify four-laning the Island Highway along that particular stretch of highway. Later on -- was it November or something? -- the minister about-faced on that particular project. He changed his tune, and they're now going to add two lanes to that.

So I'm wondering if the minister might be able to give me the traffic counts he was going by in September when he told the people in Courtenay: "I'm sorry, but the traffic counts simply do not justify changing the plans for the Island Highway from a two-lane to a four-lane for the Courtenay-to-Campbell River section." What were the traffic counts there? If we can make these others match with the same time of year, that will make it all very nice.

Hon. H. Lali: With the announcement that I made for four-laning from Courtenay to Campbell River . . . . Obviously the local people spoke fairly loud and clear. We're listening to the taxpayers as well as looking after the economic development needs of North Island. They're resource-based and tourism-based economies. So this would give them a shot in the arm for economic development. I know that all of the mayors and councils of regional districts and the chambers of commerce have been on board with the four-laning in that neck of the woods. Also, once the machinery is in there, there are economies of scale.

It's cheaper to do the project than to come back years later to try to four-lane when the traffic on it would have gone up. So there are a number of factors where I had to change my mind to four-lane rather than stick with the original plan to two-lane.

D. Symons: Thank you for that answer. You know, if you double the lanes -- basically, let's say on that area of the highways up between Armstrong and Sicamous leading up to Highway 1 -- that's one thing. You're taking a highway that's already a fairly good highway and adding the two lanes to double its capacity. But it's interesting that on the Island Highway, what you have now, from that portion of the highway that goes from Courtenay to Campbell River, is basically a city street winding along the edge of the water most of the way and a lot of driveways coming into it. So the traffic moves very poorly there.

However, if you were to build only two lanes . . . . And I'm not promoting this; I'm just talking about the situation here, because I don't mind a four-lane highway. But I want to look again at the criteria you use in judging and making judgments on highways.

If you look at building two new lanes totally removed from the two that currently sit there, move them inland, away from all the congestion and so forth that happens along that highway now. I've driven it many times and been frustrated at the slow movement of traffic at times in the year . . . . But you move that inland and you have, in a sense, more than doubled the capacity of that road, because now you've got a road where the vehicles can move. They're not impeded by driveways and all the other little communities they're going through along the Island Highway.

So what you've done, in a sense, is probably tripled the capacity of the highway by simply adding those two new lanes -- much more modern, good highway lanes -- further inland, removed from the traffic congestion of the current highway. So I'm just bringing that up to say we have that situation where there's quite a difference in how the capacity of the road will be increased by having that alternative route, so to speak, that will look after that.

I have figures for the Island Highway -- and this is summer traffic of '98 -- of about 10,000 vehicles per day on the current Highway 19. So I would look for those other highway numbers that I asked for at some future date, because I believe they will be considerably higher than that.

The original portion of the Island Highway that I was talking about, from Courtenay to Campbell River, was initially going to be completed in 1998. So I'm wondering if the minister, then, might give me an idea of what the projected completion date is for that project now.

[1600]

Hon. H. Lali: The projected completion date for Courtenay to Campbell River is 2000-01. The hon. member actually didn't end up asking a question. He was giving his viewpoint, actually, on the merits of adding two lanes along the existing Vancouver Island Highway as opposed to adding additional lanes inland. I didn't actually hear a question in there. It was more of a statement.

But one of the determining factors in that, obviously, is that along the coast of the Island . . . . It's fairly heavily populated, and there are a number of municipalities along the way. Obviously in terms of trying to build an additional two lanes, that actually would have cost more because of all the property purchased and appropriations and the other things that were needed. It would have driven up the costs there, as opposed to going inland where the property values are lower than they actually are on the coast. There aren't as many people living there.

D. Symons: I gather that the minister misunderstood what I said, because certainly I was never suggesting -- nor was the plan for the Island Highway ever -- to increase the current road to four lanes. I was simply saying that when you build a new highway inland, which the Island Highway was going to be, things will move much quicker along there because they're going to be removed from all that interference with the movement of traffic along the coast. Basically there's a multiplier factor.

Whatever you're moving along the coast now, you can probably move not twice as much along that whole corridor on the two different routes . . . . You can probably triple it, because they'll be able to move so much more efficiently on the new highway.

So the argument is now: do you want to put another two lanes there? The minister has now decided -- last November, I think -- not only to put the two new lanes in -- which I was never, ever questioning, because that was automatic . . . . It's happening to the Island Highway. But do you go to four? I was just suggesting that when you've got the two new lanes, you've certainly pretty well tripled the capacity of the route, between Courtenay and Campbell River. By putting in four lanes there, you've probably much more than quadrupled it. I'm not sure what word you could use to indicate that degree of . . . .

You've sextupled, possibly, the capacity of that particular route between those two towns. Let's leave that one, because I think we've hashed the Island Highway a little bit there.

[ Page 12957 ]

I wonder if we might take a look, then, at the Coquihalla connector, a little closer to the minister's hometown. It's been suggested that there should be some work on the road between Merritt and Aspen Grove on Highway 97C. Again, I wonder if the minister might be able to give me the traffic counts for that particular highway, which might indicate that the traffic along there is in need of more lanes.

Hon. H. Lali: We don't have the traffic count figures here with us, but we can certainly supply them to the hon. member at a later time.

The other considerations for the announcement of $10 million over two years to four-lane six kilometres of the remaining 14 kilometres that's now two lanes, between Aspen Grove and the top of Hamilton Hill . . . . Safety was an issue. We had four lanes on either side, where the speed limit is 110 kilometres and hour, and then for the remaining 14 kilometres people are driving at 90 -- or that's the posted speed limit. People were taking chances all the time. Actually, on the day of the announcement I had, travelling with me, my regional manager as well as one of my assistant deputy ministers, Dan Doyle.

In those 14 kilometres there were actually three people that passed me illegally. They were passing on double lines and also with oncoming traffic. One or two of those people were actually travelling at speeds which were in excess of 110 or 120 kilometres an hour, when the posted speed limit was 90 kilometres an hour.

[1605]

There have been a number of accidents, actually. There has been a total of 238 accidents on the Okanagan connector between Merritt and Peachland since it was opened in 1990, and 55 of those accidents, out of 238, had been at the intersection of the Aspen Grove turnoff and Highway 97.

Also, it gets congested during the peak times, from having gone from four lanes down to two lanes. Economic development is also another factor involved in this. The hon. member was actually present when I made the announcement on March 7 of this year for $490 million worth of investment under the Transportation Financing Authority. I announced at the time that economic development and job creation were cornerstones of the announcement that I was making.

W. Hartley: Hon. Chairman, I ask leave to make an introduction.

Leave granted.

W. Hartley: We have number of young visitors with us today from the United States -- some 65 grade 12 students and ten adults. They're here with their teacher, Mr. Cook. They're from the Walla Walla Academy, Walla Walla, Washington. Would members please make them welcome.

D. Symons: To deal with that particular portion of the highway . . . . I suppose there's a debate going on, which I know the minister is fully aware of, between the people in Merritt and the people in the Okanagan as to indeed a four-laning of that

section or whether you should maybe build another route that would save the going down and going up that's taking place there and that's rather difficult for the trucks. Or at least it's more time-consuming and harder on the trucks than taking a cut-off route that's been suggested as well. The cost difference is considerable in doing the two, I must admit. But nevertheless, it's something that possibly should be considered if you're looking at safety and all the rest. At the economic parts, there's some advantage to that particular project as well.

[W. Hartley in the chair.]

However, the minister did mention that they're doing a $10 million four-laning of six kilometres over two years. We might say, then, that it's three kilometres a year. It seems like it's just a fairly short piece. You've only got 14 kilometres altogether. By doing six kilometres, now, if I was a roadbuilder . . . .

If you're putting out for bids, and you say, "Well, you can put in a bid for three kilometres this year, another bid for three kilometres next year and another bid for another three kilometres, till we get the whole 14 done, or you can bid for a six-kilometre stretch this year," I'm going to bring my workers and my equipment out, and do the whole thing. I could do the six kilometres for considerably less than doing two threes, I would suspect. So you have to ratchet up all that work, get the workers out and all the rest of it. You're paying for it.

Is it not economically poor policy to do it in tiny sections like that? Shouldn't you take a little larger bite to get the best economics out of the situation?

Hon. H. Lali: I can certainly take the hon. member's comments under advisement. But first of all, I want to explain to the hon. member that it's one project over two years. It's as simple as that. It's not a matter of divvying it up into three-kilometre sections or one-kilometre sections, or whatever, and putting it over a number of years. It's one project over two years.

I think the hon. member's been in this critic's portfolio long enough to know that you just don't move the bulldozers out there and start building a road. There's a lot of work that needs to be done. There's the survey and the design work that needs to be done, the planning and the engineering that has to be done, as well as looking after the environmental issues that are out there, the agricultural issues and a number of other issues. Those take time. Doing up the engineering, the drawings and the plans all take time. I think the hon. member understands that.

It's not a simple matter of dividing up the six kilometres into two sections, then doing three kilometres one year and doing the other three kilometres the next year. It's one project spread over two years.

[1610]

D. Symons: I thought I would catch him up on that -- no such luck.

Looking at the particular portion of the road there, the concern I have, I suspect, is that once you do four-lane that -- and the Okanagan people, I think, realize this -- that's pretty well going to preclude, if you put money into upgrading that portion of the highway, the other one being built some time in the future, which might protect the minister's backside during the next election or two in the area that he represents. So there's that possible political thought, and that's certainly passing through the minds of many people in the Okanagan.

If you look at need, in a sense, I think we can find other places around the province. I believe the Kaleden bluffs or the Skaha bluffs and so forth, and Highway 99 going south . . . . There's some real traffic problems there. Moyie bluffs in the Kootenays, Three Valley Gap near Revelstoke and Goldstream

[ Page 12958 ]

Park just near here -- you know, those are areas, too, that have had serious traffic problems over the years. I gather that the ministry is going to be dealing with some of those this year and, I hope, the others next year. Certainly I think they would almost take priority over the two particular projects we've been talking about for the last half-hour. I don't know if you want to respond to that.

If not, I'll move on to the next, which is simply to look at the use of what was discussed during question period -- Highway Constructors Ltd. as a vehicle for doing the highways. Would you . . . ?

Hon. H. Lali: I didn't meant to interrupt the hon. member, but if I can maybe respond to that, then we can go on to the second part of the hon. member's question. On the issue at hand, the Aspen Grove-Merritt section, and on the other issue that the hon. member mentioned -- what is commonly known as the Kingsvale cutoff, which would bypass Merritt -- let me just explain the two. We have the existing Okanagan connector between Merritt and Peachland, with Aspen Grove to the top of Hamilton Hill, outside of Merritt, which is 14 kilometres of two-lane, while the remainder is four-lane.

The communities of Merritt, Kamloops, Spences Bridge, Logan Lake and Ashcroft are asking that that would be four-lane. Then you have the Kingsvale cutoff, which many residents of the Okanagan Valley favour, which is to build a road from the vicinity of Aspen Grove to Kingsvale, thereby bypassing Merritt. The argument is that it would be good for the Okanagan Valley in terms of economic development and that it would also save about 15 minutes' drive to the coast by car and approximately half an hour by truck.

I want to point out again . . . . I've done this in the public arena already, but for the record here, for Hansard , I just want to point out that the announcement of $10 million that I made is not a case of one option versus the other. That was never the case. I think that in terms of the road that already exists and that comes down into Merritt from the Okanagan Valley . . . . That was a decision made by a prior government -- back in 1987, I believe it was -- that the government would be connecting communities rather than bypassing them.

I think there was a strong clamour not only from the residents of the Nicola Valley, where I happen to live, but also from the people of the Okanagan Valley, who wanted to see the Coquihalla Highway system connecting the community of Merritt and also the Okanagan communities. I think the original plan before that was to bypass both communities. To their credit, the communities were successful in getting that connection to take place.

The decision between Aspen Grove versus the Kingsvale cutoff was made by a prior government before the NDP got elected in 1991. This announcement is simply about trying to get rid of the congestion point of the 14 kilometres on the existing road. It's about safety, and it's also about economic development. The moneys that were available this year and next year were $10 million, and that's the announcement that I had the pleasure of making. It was never pitting one option against the other.

[1615]

Now, obviously the residents of the Okanagan Valley see it differently, and it's their prerogative to do so. Certainly this minister and this government have never said that we weren't going to build the Kingsvale turn-off. In the estimates at the time, in order to do the cutoff option from Aspen Grove to Kingsvale, it was $80 million; that was in 1987. I don't know what the cost would be now. One can only assume that it would be at least $80 million or higher in order to do that. That's money that we don't presently have as part of our capital plan.

So it's not an option of one versus the other. Rather, what we're doing is protecting the infrastructure we've got in place right now, looking after the safety of the travelling public and also the economic development in the area.

D. Symons: It's interesting that the previous government, when they did build the road where they did, nevertheless took the right-of-way and had the corridor planned for the Kingsvale connector as well. Actually, I think Highways gathered most of that land in, so they must have had in the back of their mind that that was something worthy of consideration in the future. Although they put it in to connect communities, they had that in the back of their mind as well.

We'll leave that and go on to HCL. As I said, it began in 1993-94, I believe, with the Island Highway. About two years later that project management way or project labour office -- union hiring hall you want to call it . . . . Two years later that spread to the lower mainland for the HOV lanes that were being built along Highway 1. We now find that we're going to apply that HCL model to the Cache Creek-Rocky Mountains project as well. Basically we have this HCL type of union hiring hall spreading like an insidious virus around the province. So I'm wondering if the minister might be able to tell me, then, what the parameters are that apply to the designation of a project as an HCL project.

Hon. H. Lali: For clarification of the previous issue that we were talking about, I just want to . . . . The hon. member mentioned corridor protection done by a previous government. Actually, there was some corridor protection -- certainly not all -- and it was at the proposed intersections that would take place at Kingsvale and also at Aspen Grove.

In terms of the parameters that are set for HCL, it's $30 million and over.

D. Symons: Yes. I have documents that talk about $50 million, so I'm just wondering when it went to $30 million. I have one here from the TFA that says: "On March 31, 1997, the government announced it would apply the project agreement model used on Vancouver Island Highway to all provincially funded projects valued at more than $50 million. For '97-98 the only project affected is the construction of the high-occupancy vehicle lanes on the Trans-Canada Highway in Burnaby and Coquitlam." So when did it move from $50 million down to $30 million, and where is the bottom going to be?

Hon. H. Lali: I don't know the exact date, but it was in April of '99 that the ceiling went from $50 million down to $30 million.

D. Symons: I'm just wondering, with the way this HCL is working, if the minister can then explain . . . . If it's $30 million, what is the cost of the John Hart Bridge project going to be?

[1620]

Hon. H. Lali: The John Hart Bridge is a $30 million project, which we announced earlier. Actually, the two MLAs

[ Page 12959 ]

in the area announced it earlier. For the record, I just want to quote Mayor Colin Kinsley of Prince George. He says -- and he's referring to the HCL model on the John Hart Bridge: "It will put the city's highly skilled workforce and integrated supply network, developed in the past decade, back to work." The chamber of commerce president, Lorne Calder, said: "The job creation focus is the key to this." Also, Prince George Construction Association chairman Todd Patterson -- I believe that's his last name; it's a little unclear here -- said: "Any time local labour, equipment and suppliers can be used, it's a positive for the city."

D. Symons: Yes. Of course, we went around that tree during question period earlier in the day, and I intend to spend little time with it. But it's interesting that the figure I saw for the John Hart Bridge was $27 million.

It's rather interesting that the minister announced that it's $30 million, and he said: "We've reduced the floor for HCL projects down to $30 million." So it looks like you're going to adjust the level, where you say, with this union hiring hall sort of technique for doing business in the province: "We'll move it to whatever the cost of the project is to suit our needs." You don't seem to have a philosophical level where, at a given amount, that's where you'll call it in, because you've done it in this particular project here as well.

The minister was quoted back in March of this year, when we were talking about the Port Mann Bridge that will be high enough in cost, I think, to meet the old HCL ceiling -- or floor, I suppose. Certainly we'll meet the newer floor. But the minister was quoted in the Vancouver Province as saying: "The work will be done at night beginning in September. Union and non-union firms will be invited to bid." Yes, they're invited to bid, to go through union . . . to go that way, but I'm wondering what happens after a period of time.

When they're invited to bid, will the project be subject to the HCL union hiring hall program for that particular project as well? It doesn't mention it. It just says that union and non-union firms will be bidding. Will it be an HCL project for the Port Mann Bridge?

Hon. H. Lali: I just want to clarify for the hon. member on the John Hart Bridge. He mentioned a figure of $27 million. That's a five-year-old figure that the hon. member is citing, so the $30 million figure is for the John Hart Bridge. And the Nechako interchange has to be changed as well. There's no effort by anybody to stop the costs so they can come under the HCL model, as the member may try to suggest. I think that by trying to cite an old figure -- a five-year-old figure -- he's trying to use that as evidence for his statement.

The hon. member wanted to know about union and non-union firms being eligible to bid on projects. I want to point out to the hon. member that on the Vancouver Island Highway project, 60 percent of the contracts went to non-union firms. So there's no effort to shut out non-union firms. It's a fair bidding process where union and non-union firms are eligible to bid on an equal footing. And as the results have shown, both on the Vancouver Island Highway project, where 60 percent are non-union contractors, and also on Height of the Rockies, where out of the 17 contracts already let, eight of them have gone to non-union firms and owner-operators . . . .

The only stipulation there is that after 30 days, the workers working on the project must belong to one of the unions as a part of this agreement. And that's only for the term of the contract -- for the term of the project. Once the project is over, then the workers are eligible to do whatever they wish, whether they want to be union or non-union. That's their priority; that's their prerogative to do so.

[1625]

D. Symons: Yes, and as I understand, a non-union firm can bid on the project. As the minister said, if I have a firm and I want to bring in my employees that have worked well for me and I've got a good workforce, basically they're going to have to go into the HCL model of hiring hall and wait their turn till their name comes to the top of the list. So I won't necessarily get my workers on the project. I will get a designated number of workers that I order through this union hiring hall. Is that not correct?

Hon. H. Lali: Each successful contractor is allowed to name up to five of their own employees, and then beyond that the workers apply at HCL for positions. They are hired based on their qualifications and merit. They're not placed in any kind of order. Whether they were belonging to a union or non-union firm prior to working on the HCL project, they would go and apply under HCL and be hired in a fair process. Qualifications and merit are at the top of the list.

D. Symons: Yes, but what the minister is saying is that beyond the five, you don't get the workers, and you don't get to choose your workers. They're going to be decided by somebody else. That's the rub in that particular aspect of it.

Also, there's the other thing. You can say that well, after the work is finished . . . . And that worker might be working, so after 30 days he must join a union to keep his job, or he's out the door. So he joins one of the operating engineers -- or whatever -- unions. After two months, when that particular job that he's doing is done, he's out the door because the project is over. He may apply later on when another

section of the road is being done -- and I'm thinking of the Island Highway as an example of this. Maybe the firm he's working for will win another contract further along and do another

section of the road, but that worker has this union card in his back pocket. I mean, he signed up for the union; I don't think it ends the day he walks out the door.

We have Bill 84, passed in 1992 in this province, that basically says that we don't have to have a certification vote in the province of British Columbia anymore. Once over 55 percent of the members of a given workforce of an employer are signed-up members of a union, that firm is now going to have a collective agreement put upon it. I'm just curious whether, after an employer goes through two or three iterations of his employees having to join a union in order to be able to work in the province, those employees in that firm necessarily want their employer to become certified or not.

It will happen pretty well automatically because of the provisions of Bill 84. Could the minister sort of comment that that's a distinct possibility -- the way that things are rigged up between the HCL agreement and the conditions of Bill 84? It's the way of this particular government: favouring its friends and insiders in certain -- and I will say certain -- unions. Certainly it's only some unions that are recognized as being legitimate by this government for working on the Island Highway project.

Hon. H. Lali: The hon. member suggested that once an employee finished working for HCL, had finished their con-

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tract -- let's say it was for two months -- then they're turfed out. Well, that's not the case. On HCL projects, once a person is working there, they're no longer an employee of the contractor; they become an employee of HCL. So when that particular work is done on a particular worksite, they're not turfed out. They're eligible to work on another worksite.

I think the hon. member already knows this, but I just want to clarify for the record that employees are eligible for work if they live within 100 driven kilometres of a particular worksite. So on the Vancouver Island project, the first chance is given to those workers who live within 100 kilometres of a particular worksite. And if there are not enough eligible employees found, then obviously a person living elsewhere on the Island is eligible to work on a particular worksite -- and then beyond that, people from off the Island.

[1630]

D. Symons: The minister didn't really answer the question or situation I posed. You might have 20 employees that belong to ABC Construction Co. To keep the job now for more than 30 days, these 20 employees have joined a union -- operating engineers, let's say, if we're just using an example of something. A member of the House might appreciate that particular union; it's a good union, I'm told. Anyway, they joined the union. But they aren't necessarily interested in joining the union. They would have had very good relations with their boss over the years -- their employer -- and they're quite happy to keep it that way.

All right -- so they don't work for him on this project; they work wherever operating engineers are needed on the project. However, when that Island Highway moves further up -- we move outside the 100-kilometre radius the minister was speaking about a moment ago -- and these fellows come back to the ABC Construction Co., they've all got a union card in their pocket. They've got the operating engineers card in their pocket. All one of those members has to do now is go to the Labour Relations Board and say: "We have more than 50 percent of the employees of ABC Construction as members of the operating engineers.

We want the operating engineers to be the bargaining agent for ABC; we want them to be a bargaining unit for the ABC company."

The company would not necessarily know it. A number of the employees there -- the 20 employees that I referred to a moment ago -- wouldn't necessarily have had any desire to unionize ABC Construction. It would have happened automatically. That's the way things are set up in the province. I just posed to the minister earlier: is that not a possibility?

Hon. H. Lali: I just want to clarify for the hon. member that the Labour Relations Board has ruled on an issue related to HCL that the workers who are working on HCL projects are employees of HCL and not of the contractor. If those employees that are part of a union under HCL go back to their old company to work, that firm does not automatically unionize. They'd have to go through that entire certification process which is there as part of the Labour Code. I think this is where the confusion of the hon. member is coming from.

[1635]

D. Symons: No, actually, I differ with the minister. I don't think confusion is there in my mind. The way Bill 84 reads -- a bill passed in 1992 -- it says that once more than 55 percent of the employees of a given employer are signed up with a given union, then that union is the bargaining agent for the employees. If they have joined a given union through HCL while they're not working for the ABC company and they come back to the ABC employer after the Island Highway stuff, it'll work automatically. But we'll leave that. We are tending to differ on this.

What I might look at now -- I wasn't going to before the minister mentioned that somehow I was using an old figure on the John Hart Bridge. I don't think it really mattered whether it was $27 million, $30 million or $35 million. It's apparent that the government will move that floor for HCL agreements to wherever they want it to be. You moved it from $50 million down to $30 million. You could have moved it to $25 million, and you probably will at some time in the future when another project comes along.

But I wonder if we might look at the other movement you've made on this, and that has to do with day labour. We're not dealing with $30 million or $20 million. We're dealing in the tens of thousands of dollars, where often people will come in and hire the equipment out in a given project year. You're saying: "Well, they're going to have to go through the HCL model again -- the same thing."

I've got the letter that went out to companies -- a long to-do about the Cache Creek-Rocky Mountains project and hired-equipment registration. They were basically told that any equipment can be registered but that owners affiliated with the B.C. Highway and Related Construction Council union will be given priority placement.

Now, if we take what the minister was saying earlier in the day during question period . . . . We'll move up to Sicamous for a moment on this. Take the situation where there are people who have worked for years doing day labour. They've rented or hired their equipment out to the ministry, and they have one or two or three or four workers -- not a large number -- that work on a daily basis. Often this is in moving earth and things of that sort with the highway.

We now have a situation where you're saying: "Well, these people will have to register first with HCL, and even if they do, the company is a non-union company. Then they're still at the bottom of the pecking order." The workers may have to be in HCL if they are working for any more than 30 days, but the company itself will be at the bottom of the pecking order, according to this letter that went out from the ministry. They'll be down there. And what will also happen is that you'll still look for a union company within the 100-kilometre radius referred to earlier.

What seems to be happening in Sicamous is that you're looking for union companies outside of that 100-kilometre radius to come in, and you're leaving the non-union firms who are right there -- with the project going on at their front door, basically -- and you're saying: "Sorry, you guys can't work here." I'm wondering if you might explain if that isn't exactly what's happening in the Sicamous area now.

Hon. H. Lali: I just want to clarify for the hon. member that the workers are employees of HCL and work under a collective agreement between HCL and the building trades. They're not employees with the individual contractors when they're working on HCL projects. So if they go back to their own company, the one they previously worked for, they would have to re-sign cards to become union members again. They have to go through that process.

The hon. member also mentioned why we reduced the $50 million down to $30 million for HCL projects. Well, if one

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looks across the province, some of the bigger money items are actually all located in the urban areas, where some of the bridges are very costly. Also, the Vancouver Island Highway was a fairly big and lengthy project. They would fit over the $50 million threshold that had been established.

Whereas in the rural areas we couldn't find projects, with the exception of Cache Creek to the Height of the Rockies, which is a multi-year project that will eventually end up in the hundreds of millions of dollars . . . . There were projects throughout the province which were not of that kind of magnitude, unless one were to completely build a brand-new highway or do something along an entire corridor.

[1640]

The success of the Vancouver Island Highway project resulted in a clamour from individuals and communities throughout rural areas in the interior and the north of the province who wanted to see the HCL type of local-hire provisions and equity hire in their own local areas. In terms of meeting those goals and others, the threshold was lowered from $50 million down to $30 million so that benefits would be derived for people in the north of the province who didn't want to see Alberta workers coming in to work on projects financed by the B.C. government.

They wanted to see people in Prince George, where there's a very high unemployment rate and lots of skilled labour not working . . . . They wanted to see people working on projects financed by the provincial government within that particular area. That's why the threshold was lowered to $30 million.

The hon. member mentions the issue of day labour. This is not something new for Cache Creek to the Height of the Rockies. This is something that existed in HCL on the Vancouver Island Highway project. I just want to give the hon. members some numbers here. This is a fairly small project. In the Sicamous day labour, Kerr Road to Craigellachie, there are 29 people who belong to a union, and there are ten people on that particular project who are non-union workers. In terms of equipment rentals, five firms were union and four of them were non-union. Subcontractors: zero were union and two were non-union.

It's quite fair. Non-union firms are competing on an equal footing with unionized firms in terms of getting the contracts. As I mentioned previously in our discussions today, 60 percent of the contracts that were awarded on the Vancouver Island Highway project had gone to non-union firms.

D. Symons: I'll just read again from this letter that went out to hired-equipment registration. It says: "HCL is currently building a call-out list for equipment to be used on the Cache Creek-Rocky Mountains work. To be considered for any day-labour hire on this work, you must register equipment with HCL." Fair enough. It goes on and says: "Any equipment can be registered, but owners affiliated with a B.C. Highway and Related Construction Council union will be given priority placement."

It's not an equal footing, as the minister was suggesting a moment ago. It says that you're going to give those companies that are affiliated with a union priority. Basically and historically in this province, day labour has gone out to local people. You're saying: "Well, this is local hire and so forth." Primarily, even if a firm came in from Alberta, they do not bring all their workers from Alberta. They use day labour and that sort of thing, in areas. I'm not suggesting that we bring them in from Alberta, but I'm saying that the majority of workers on projects have generally come from around the area where the project is taking place. This is just a case of it's much easier.

Basically what we seem to have here, then, is that you've moved your sort of HCL model into small, independent firms as well. The way this is set up -- by giving priority -- you're basically blackmailing people into joining a union if they want to work in this province. You know, it's only in B.C. and former communist countries that we see this form of intimidation used. I'd ask the minister to at least be honest and show this government's true intentions, then. Would he please place signs at all entrances to the province of British Columbia announcing: "All highway work in B.C. is a closed shop.

Non-union need not apply"? That's basically the direction this government is going with this HCL model and the expanding of its roads and all the projects in the province of British Columbia.

Hon. H. Lali: I read out some of the results of the successful contractors in the last question that the hon. member asked. If he looks at the results, the member will know that the process is fair, and it's evident in the results that are here in terms of equipment rentals and subcontractors -- five going to unionized outfits, six going to non-unionized outfits.

[1645]

I just want to read out, for the hon. member's benefit and also for the record, the local-hire provisions. They are:

"Qualified union members in the local area -- within 100 kilometres -- are given hiring preference. HCL will hire other qualified workers in the local area -- within 100 kilometres -- when qualified local union members are not available. For [the Vancouver Island Highway project], the next level of hiring preferences is other local residents on Vancouver Island, qualified union members first, followed by the mainland qualified union members. For the HOV project, this sequence operated in a reverse fashion -- i.e., the mainland first, etc. Hiring for work on the Lions Gate Bridge will operate similarly.

Qualified equity candidates can be hired by HCL at any time to meet employment objectives."

G. Abbott: About ten days ago I attended a meeting in