1990 Legislative Session: 4th Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JULY 17, 1990

Afternoon Sitting

[ Page

11045 ]

CONTENTS

Routine Proceedings

Oral Questions

Taped conversations of Attorney-General. Mr. Williams –– 11045

Closing of Canadian consulate in San Francisco. Mrs. McCarthy –– 11046

Taped conversations of Attorney-General. Mr. Gabelmann –– 11046

Independence of the office of Attorney-General. Mr. Gabelmann ––

Closure of Duffey Lake Road. Mr. Rabbitt –– 11047

Independence of the office of Attorney-General. Mr. Gabelmann ––

Mr. Williams

Mr. Miller

Arsenic and lead residues in Wells area. Mr. Vant –– 11047

Vancouver Stock Exchange Amendment Act, 1990 (Bill PR401).

Committee stage. (Mr. Mercier) –– 11047

Third reading

Committee of Supply: Ministry of Regional and Economic Development estimates. (Hon. S. Hagen)

On vote 56: minister's office –– 11048

Hon. S. Hagen

Mrs. Boone

Mr. G. Janssen

Mr. Clark

Ms. Marzari

Mr. Jones

Ms. Cull

Mr. De Jong

Mr. Barlee

Assessment and Property Tax Reform Act, 1990 (Bill 49). Committee stage.

(Hon. L. Hanson) –– 11075

Mr. Blencoe

Mr. Clark

Ms. Marzari

Third reading

Game Farm Act (Bill 9). Second reading. (Hon. Mr. Savage)

Hon. Mr. Savage –– 11084

Ms. Edwards –– 11085

Hon. Mr. Savage –– 11086

Food Products Standards Act (Bill 57). Second reading. (Hon. Mr. Savage)

Hon. Mr. Savage –– 11086

Mr. Barlee –– 11087

Hon. Mr. Savage –– 11087

British Columbia Wine Act (Bill 58). Second reading. (Hon. Mr. Savage)

Hon. Mr. Savage –– 11087

Mr. Barlee –– 11088

Hon. Mr. Savag –– 11088

Health Professions Act (Bill 31). Second reading. (Hon. J. Jansen)

Hon. J. Jansen –– 11088

Mr. Perry –– 11089

Hon. J. Jansen –– 11089

Community Care Facility Amendment Act, 1990 (Bill 43). Second reading.

(Hon. J. Jansen)

Hon. J. Jansen –– 11089

Mr. Perry –– 11090

Ms. Marzari –– 11090

Hon. J. Jansen –– 11091

Health Statutes Amendment Act, 1990 (Bill 61). Second reading.

(Hon. J. Jansen)

Hon. J. Jansen –– 11091

Mr. Perry –– 11092

Hon. J. Jansen –– 11092

Family and Child Service Amendment Act, 1990 (Bill 45). Second reading.

(Hon. Mr. Jacobsen)

Hon. Mr. Jacobsen –– 11092

Ms. Marzari –– 11093

Hon. Mr. Jacobsen –– 11093

Guide Animal Act (Bill 47). Second reading. (Hon. Mr. Jacobsen)

Hon. Mr. Jacobsen –– 11093

Mrs. Boone –– 11093

Hon. Mr, Jacobsen 11093

Labour and Consumer Services Statutes Amendment Act, 1990 (Bill 51).

Second reading. (Hon. Mr. Jacobsen)

Hon. Mr. Jacobsen –– 11094

Mr. Blencoe –– 11094

Mr. Perry –– 11096

Hon. Mr. Jacobsen –– 11097

Solicitor General Statutes Amendment Act, 1990 (Bill 62). Second reading.

(Hon. Mr. Fraser)

Hon. Mr. Fraser –– 11097

Mr. Gabelmann –– 11097

Hon. Mr. Fraser –– 11098

Committee of Supply: Ministry of Solicitor-General estimates.

(Hon. Mr. Fraser)

On vote 61: minister's office –– 11098

Hon. Mr. Fraser

Mr. Clark

Mr. Lovick

TUESDAY, JULY 17, 1990

The House met at 2:03 p.m.

HON. MR. REYNOLDS :

Mr. Speaker, I would like to introduce one of Canada's greatest

citizens. Dr. Ian McTaggart-Cowan, who has the Order of Canada, is in

the gallery this afternoon. Dr. McTaggart-Cowan is one of British

Columbia's — and Canada's — outstanding scientists, educators and

environmentalists. He is also chairman of the public advisory board to

the habitat conservation fund and has been a member since 1981. I

would ask this House to make him very welcome here in the Legislature.

MR. PERRY :

On behalf of this side of the Legislature, I welcome Dr.

McTaggart-Cowan as well. I had the pleasure of studying briefly in his

department, where he is a very famous and popular teacher. So it's a

pleasure to see him here today.

HON. MR. SAVAGE :

It's my pleasure to rise in this assembly today to introduce the High

Commissioner for the Kingdom of Lesotho. Would you please welcome His

Excellency Raphael Kali.

Also in the precincts today are

the husband of my ministerial assistant, Mr. Dave Logie, and their son

Michael. Would the assembly please make them welcome.

MR. G. HANSON :

Mr. Speaker, I have three guests here in the legislative gallery today:

Barbara and Danny Pedrick and their daughter. I wonder if the House

would please make them welcome.

MR. PELTON : With the

House's indulgence, I have two introductions to make today. First of

all, hon. members, our Speaker's brother and sister-in-law are in the

gallery today, and I would ask you to extend a very warm welcome to

Martin and Sue Rogers.

Also, most of you might know Mrs.

Joy De Casseres, who has served our caucus long and well. Her sister,

Mrs. Phyllis Murray, is with us today from Hawaii and also her

granddaughter, Katie Stevens, from Oklahoma. I wonder if you would

extend to these two beautiful ladies a nice warm British Columbia

welcome.

MR. VANT : It gives me great pleasure to

introduce Sharon Franks and Ryan Nelson from the Quesnel area in the

northern part of the great Cariboo constituency. I know the House will

give them a warm welcome.

HON. MR. BRUMMET : I know

that Jim Fry, the government agent from Fort St. John, is in Victoria

for meetings today. I notice he is in the gallery, and I would like the

House to make him very welcome.

Oral Questions

TAPED CONVERSATIONS

OF ATTORNEY-GENERAL

MR. WILLIAMS :

To the hon. Premier. The Deputy Attorney-General moved quickly and

properly, but without ministerial guidance, to investigate the

information the member for Esquimalt–Port Renfrew (Mr. Sihota) put

before the House, Is it the Premier's view that the deputy took

appropriate steps?

HON. MR. VANDER ZALM : I certainly wouldn't want to interfere with the Deputy Attorney-General or the process.

MR. WILLIAMS : The deputy reassigned Mr. William Stewart. Does the Premier consider that appropriate?

HON. MR. VANDER ZALM : As I said, I don't want to interfere with the Ministry of Attorney-General, the deputy or the process.

MR. WILLIAMS :

Mr. Premier, there are serious questions of tampering with the justice

system. To date you have not responded to the appropriateness of the

former Attorney-General's actions, nor have any of your colleagues. Do

they not offend you?

HON. MR. VANDER ZALM :

As I've

said a number of times, there are a number of things that certainly

offend me. I'm sure that if a person has said certain things and they

are on tape, that person has to come to terms with that for himself or

herself — as the case may be —regardless of who was taped. I

certainly have the bounds within which I act, perform and respond.

I'm also very offended — and I hope the member has a question about this —

with the process used by the opposition in using tapes that were

questionably obtained and in making them public as they did. I think

that has been tremendously offensive, not only to many members on this

side of the House and, hopefully, on your side of the House, but to the

public at large. I would hope that perhaps at some point in time you

might consider an apology for your actions.

MR. SPEAKER : Just before recognizing the first member for Vancouver East on the next

question, I would remind the member that the propriety of discussing

this issue is a very delicate one at this time because of the pending

investigation. We wouldn't want questions brought up in this House to

jeopardize any investigation being carried out at another level.

MR. WILLIAMS : Thank you, Mr. Speaker. I appreciate that.

guess the fundamental question is around the question of the

independence of the justice system. To the Premier again, the actions

taken by the hon.

[ Page 11046 ]

member

from Esquimalt–Port Renfrew were a process of first seeing the deputy

and then appearing before the House. Would the Premier argue that

tampering with the justice system should have gone unchecked?

MR. SPEAKER : This is not appropriate for a question.

CLOSING OF CANADIAN CONSULATE

IN SAN FRANCISCO

MRS. McCARTHY :

My question is for the Minister of International Business and

Immigration. It has been reported that the office of the Canadian

consulate in San Francisco is going to be closed by External Affairs.

It handles many business and immigration matters and has been the most

aggressive office to benefit British Columbia's trade opportunities.

view of the fact that External Affairs is announcing its closure, could

the minister tell this House what he plans to do about it and what

representations he plans to make to the federal administration to stop

this happening to our trade opportunities in the Pacific Rim and to our

opportunities with free trade in the United States?

HON. MR. VEITCH :

It's a very important and cogent question. Today I am hand-delivering a

message to the Rt. Hon. Joe Clark, the Secretary of State for External

Affairs. I want to say that the San Francisco office has indeed been

efficient and worked very well on behalf of the people of British

Columbia. The federal government intends to move the operation to Los

Angeles. Regrettably we have not seen a similar degree of interest,

commitment or communication from the Los Angeles office, where fully 71

percent of the entrepreneur and investment visas issued through the Los

Angeles office were Quebec cases, and that's a rising trend.

MR. SPEAKER : Order, please.

HON. MR. VEITCH : Mr. Speaker, may I have a chance to answer the question?

MR. SPEAKER :

No, you may not have a chance to filibuster the answer to the question.

When a question is asked, the answer to the question must be within the

scope of the realm of the question. If the minister wishes to get up

and recite a number of statistics that the minister was not asked

about, then you're outside of the bounds of the realm of the question.

MRS. McCARTHY : On a supplementary, I appreciate that the minister is

saying how important that office is, so he's agreeing with me. If External

Affairs insists on this action, is the government prepared to put a trade officer

from British Columbia to assist them in that endeavour on behalf of trade opportunities

in this province?

HON. MR. VEITCH :

Very briefly, the closing of the San Francisco office is unacceptable

to the province of British Columbia, and we'll take whatever steps are

necessary to ensure that the interest of British Columbia is looked

after, including dispatching one of our own officers to San Francisco.

TAPED CONVERSATIONS

OF ATTORNEY-GENERAL

MR. GABELMANN :

I have a question for the Premier. I was a bit puzzled by his answer

earlier. It appears the Premier is prepared to criticize and to

prejudge the member for Esquimalt–Port Renfrew. Why is he not equally

prepared to...?

MR. SPEAKER : Order, please. The

difficulty the Chair has with this matter is that the Chair has been

asked to rule on a matter of privilege, and the Chair has this very

matter under consideration at this time. Until such time as the Chair

has made a decision, discussion on the matter is out of order. It

prejudices the entire process under which the Chair is endeavouring to

maintain the procedures of the House.

MR. GABELMANN :

I understand that if my comments were in respect of the government

House Leader's motion and the member for Esquimalt–Port Renfrew's

motion.

My question to the Premier is: why has he not been

prepared to make comment upon the behaviour of the Attorney-General?

It's a different question.

[2:15]

HON. MR. VANDER ZALM :

I want to make it very clear that my criticism has certainly not been

directed at one person. I think my criticism has been one of process,

and I don't even suggest right now that it was necessarily the member

for Esquimalt–Port Renfrew. As a matter of fact, it's reported that

this matter came before the NDP caucus, and the Leader of the

Opposition felt this matter to be too difficult for him to deal with

and therefore passed it back to the member for Esquimalt–Port Renfrew.

So if there's blame to be had, you all wear the blame — the whole of

your caucus.

INDEPENDENCE OF THE OFFICE

OF ATTORNEY-GENERAL

MR. GABELMANN :

Mr. Speaker, I want to direct some questions to the Premier regarding

the independence of the office of the Ministry of Attorney General. I

want to read a quote from Hansard

on June 28, 1988, by the former Attorney-General, Mr. Brian Smith. In

his resignation statement he was worried that the Ministry of

Attorney-General would come under closer control by the Premier's

office and "so weaken the independence of the Attorney-General." Later

he said: "I also know that this" — the weakening of the independence — "can be accomplished by shifting ministers...."

[ Page

11047 ]

To the Premier: is that why he appointed the second member for Kamloops as the Attorney-General?

CLOSURE OF DUFFEY LAKE ROAD

MR. RABBITT :

Mr. Speaker, my question is to the Solicitor-General. Roadblocks by

natives and non-natives are appearing in the Pemberton-Lillooet area.

With the closure of the Duffey Lake Road and other roads throughout

British Columbia, there's the potential for an escalation of the

dispute. My question to the minister is: what is the minister doing to

ensure that the road will be reopened and to eliminate conflict which

could result in a violent confrontation?

HON. MR. FRASER :

Mr. Speaker, in the case of road closures, regardless of who puts them

up, the usual approach is to find out what the problem is and to try to

get it resolved off the public highway system. However, in the event

that the roadblock persists, then the normal course of justice must be

followed — in other words, the roads must be kept open.

INDEPENDENCE OF THE OFFICE

OF ATTORNEY-GENERAL

MR. GABELMANN :

Mr. Speaker, I want to ask another question to the Premier. On June 28,

Brian Smith said in his statement: "I fervently hoped that I had

established and explained the importance of the neutrality and

independence of my office to the Premier. I now believe that I have

failed to make that impression." Does the Premier agree that that

impression still remains to be made on the Premier and on his

government?

HON. MR. VANDER ZALM : I find

interference in the criminal justice system wholly inappropriate. If

there is anyone or any group that might be labelled with attempting to

interfere, it seems to me it's coming from the other side today.

MR. WILLIAMS :

Mr. Premier, there is a clear pattern here. Brian Smith felt he could

not maintain the independence of the Attorney-General's office with you

as Premier, and he left. It is now clear that the independence of the

office was not maintained after Brian Smith left. Would you not agree

that there is now a need for an independent review of all the major

actions of the recent Attorney-General during his tenure?

HON. MR. VANDER ZALM :

Again I remind the member there is a process. But let me add this. It

doesn't follow that because someone said something or did something,

therefore everything following is as he says it to be. If that was the

case, then the taping that took place at the NDP national convention

would suggest that you are responsible for the taping now, and I don't

suggest that.

MR. MILLER : To the Premier. The

Premier is the presiding officer of the executive council and is

responsible for its actions. Does the Premier consider it his duty to

ensure that cabinet does not act beyond the powers given to it by the

laws of the province?

HON. MR. VANDER ZALM : I know

my role. I wonder if perhaps we could all simply sit back and think of

all of our roles, including the member who asked the question. I think

we need to discuss together the impact of the actions that we saw in

the House by the member who has now seen fit to be absent — the member

for Esquimalt–Port Renfrew. I detest taping, tapping, bugging, spying

or any type of invasion of the privacy of individuals.

ARSENIC AND LEAD RESIDUES

IN WELLS AREA

MR. VANT: I have an urgent question for the Minister of Environment.

The residents of Wells, including the chamber of commerce, are so concerned

about the residues of arsenic and lead in the old ball diamond and in the tailings

of the Island Mountain gold-mine that they are threatening to blockade this

Friday Highway 26, which is the main highway to Wells and Barkerville if there

is no action taken regarding these residues of arsenic and lead. Given this,

does the Minister of Environment plan to do anything about this rather urgent

problem?

HON. MR. REYNOLDS :

I can advise the member that we will be announcing a program for

remediation sometime this afternoon which will include the capping of

public use areas with granule fill, removing access to Jack of Clubs

Lake, excavating or replacing soil from residential yards and

revegetating those areas.

We will also be working with the

Ministry of Health to make sure that proper testing is done in those

areas and that this issue is resolved immediately.

Orders of the Day

HON. MR. RICHMOND : I call committee on Bill PR401, in the hands of the member for Burnaby-Edmonds (Mr. Mercier).

VANCOUVER STOCK EXCHANGE

AMENDMENT ACT, 1990

The House in committee on Bill PR401; Mr. Pelton in the chair.

Sections 1 to 4 inclusive approved.

Title approved.

MR. MERCIER : Mr. Chairman, I move that the committee rise and report the bill complete without amendment.

[ Page 11048 ]

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill PR401, Vancouver Stock Exchange Amendment Act, 1990, reported complete without amendment, read a third time and passed.

The House in Committee of Supply; Mr. Pelton in the chair.

ESTIMATES: MINISTRY OF

REGIONAL AND ECONOMIC DEVELOPMENT

On vote 56: minister's office, $352,172.

HON. S. HAGEN :

It is my pleasure to present the estimates for the Ministry of Regional

and Economic Development. The past year has been a good one for our

government's drive to promote sustainable and regional economic

development and diversification throughout the province of British

Columbia.

It has been another good year for the development

of our small business sector. The men and women of B.C.'s small

business community are the driving force of our provincial economy.

They are the unsung heroes, the people who have a dream and put in the

long hours to make it happen.

This government and my

ministry are proud of our close relationship with small business. Mr.

Chairman, over 95 percent of the new jobs created in our economy last

year were generated by small business, and close to 50 percent of the

new jobs generated in Canada came right here In British Columbia.

That's a tremendous record of success.

In British Columbia

today there are over 105,000 small businesses. Each of these operations

started as a dream, a dream by an individual, a family, a new Canadian,

a young person. Many small businesses are started by women; in fact,

women represent nearly one-quarter of all business owners in Canada.

According to the Canadian Federation of Independent Business,

projections in Canada and the United States suggest that 50 percent of

all businesses will be owned by women by the year 2000.

The

incredible opportunities the small business sector provides underlines

the dynamism of our economy and the ingenuity of our people. That kind

of stuff builds strong communities and makes this province the best

province in Canada. This government has long recognized the key role

small business plays in economic development and diversification. I

want to acknowledge the fine efforts of all of the staff of the

ministry in helping to make this important objective a reality.

The Ministry of Regional and Economic Development offers many programs and

services to create a climate for the growth of small business. This is a service

ministry serving all regions of the province and all sectors of our province's

dynamic business community, with a special emphasis on small business.

May 25 I had the honour to address the members of the British Columbia

Chamber of Commerce at their annual general meeting in Penticton. I

marked the occasion by thanking our various local chambers of commerce

for their very valuable contributions to the economic and social

well-being of the cities, towns and municipalities around this province.

addition, I announced three new business incentive programs which flow

directly out of the recommendations of our government's task force on

small business in B.C. These three new programs are: the business

start-up program, the small business assistance program and the

business expansion program. They are important for a variety of

reasons. As part of our sustainable development effort these programs

will create at least 6,000 jobs during the first two years of

operation. The programs are regionally differentiated. People

up-country get a little more flexibility financially.

The

business start-up program has characteristics that are specifically

aimed at assisting women. It is also bureaucracy-free, as it will be

delivered by the major financial institutions in the province, which

together have over 800 branches provincewide. These new programs are

going to be a very important part of our economic development equation.

I look forward to discussing them in greater detail as we proceed in

the debate.

As members of this House are aware, the small

business task force was made up of a wide cross-section of people from

the small and medium-sized business community. We also had a very good

regional representation, again underlying the commitment of this

government to take full advantage of the ideas and energy of people

from all across this great province. In fact, the programs and services

that my ministry offers are specifically designed to build on the ideas

and energy of all British Columbians.

For example, under

our business information centres program, we work with local chambers

of commerce to provide much-needed business information services at the

grass roots community level. We have over 75 chambers of commerce

enlisted as business information centres. The government has also

provided access to government services for all British Columbians by

ensuring a prompt, efficient delivery service. My ministry's access

centres are one-stop shopping centres for key government services.

Access centres have now been opened in Nanaimo, Fort St. John,

Chilliwack, Merritt, Cranbrook, Terrace, Dawson Creek, Williams Lake

and Prince George.

[2:30]

Another

very exciting success story has been our program called Business

Opportunities at Your Doorstep — or BOYD. These workshops, developed by

business resource teams in each of the communities, give people

information on local business opportunities. They also allow local

entrepreneurs the opportunity to meet and exchange ideas with people

who have specific business expertise.

We've held 17 BOYD

conferences around the province with almost 3,000 people attending.

They have been held in Port Alberni, Hope, Courtenay,

[ Page

11049 ]

Parksville, the Elk Valley, Nelson, Powell River,

Abbotsford, Kelowna, Mission, Sidney, Merritt, Langley, Williams Lake

and Quesnel.

Another successful program of our ministry is

our Community Organization for Economic Development, which is also

known as the COED program. Under this program, communities receive

assistance to support community based economic initiatives. During the

last fiscal year, over $2 million worth of grants were provided to over

100 communities, 94 of which were outside the Greater Vancouver

Regional District. These grants supported 200 projects, 176 of which

were in communities outside the GVRD.

Another important

initiative of the Ministry of Regional and Economic Development is our

home-based business program. The ministry sponsors workshops on

starting a home-based business and provides advice on how to market a

home-based business product. During the last fiscal year 100

home-based-business seminars were held, which attracted over 3,000

participants.

Each year 15,000 new home-based businesses

start up in the province of British Columbia. We want to encourage

their success and to introduce even more people to this unique form of

enterprise. We are doing this through forums like Market Discovery and

the B.C. Creative Art Show at Market Place.

Through another

Regional and Economic Development program called Strong Communities in

the '90s, selected local communities, which are developing

sophisticated mechanisms for economic growth, are being helped to

diversify and expand their economies. Nine communities are being

assisted under phase one of the program. These communities are Gold

River, Maple Ridge, Dawson Creek, Kimberley, Valemount, McBride, Salmon

Arm, Nelson, Terrace and Houston.

The ministry's small

business venture capital program encourages investment in British

Columbia by providing an incentive to the private sector through a tax

credit equal to 30 percent of the amount invested up to March 31, 1990.

Seventy million dollars has been raised, and some 1,500 jobs have been

created or secured.

The employee investment program helps

workers to invest in their companies or in work-sponsored venture

capital funds. During 1989-90 five companies registered plans

representing some 500 employees. For example, the program enabled IWA

employees to become owners of West Coast Plywood in Vancouver, thereby

preserving 275 jobs.

British Columbians from all regions

are working with me, my ministry, my colleagues in caucus and the

regional development board to identify and implement initiatives that

reflect regional priorities. Regional development means local

participation, and that's why we have worked and will continue to work

with community leaders throughout this province.

For example, as part of the transportation planning process, over 600 people

serve on 50 regional committees, including 64 mayors and 41 aldermen — all from

outside the lower mainland southwest region. These committees brought local

insight and understanding into the transportation planning process. They met

with community groups to determine and assess local transportation priorities.

The first year priorities are now being met and projects announced by my colleague

the Minister of Transportation and Highways (Hon. Mrs. Johnston) under our Freedom

to Move initiative.

part of the regional development strategy we have established task

forces comprised of local citizens in all eight regions. The people in

the regions are helping the provincial government to develop the local

economy and infrastructure. They are defining that role through their

work on various task forces, including task forces on economic

development, tourism, health care and education. Thus regional input is

providing the blueprint for future action.

All regions have

benefited from our government's emphasis on promoting environmentally

sound economic growth. Over 30 companies from various regions of the

province and representing a cross-section of environmental industries

participated in this year's Globe '90 conference.

As well,

we provided funding to ensure that we had strong regional

representation at the recent Hong Kong trade show from places like

Prince Rupert, Victoria and Kimberley.

At the International

Trade and Investment Exposition there was representation from North

Coast, Mainland-Southwest, Vancouver Island-Coast, Thompson-Okanagan,

Kootenay, Nechako and Cariboo.

We also helped more than 70 companies from all parts of the province to participate in Market Discovery.

Another

key element of our strategy for economic diversification is our strong

support for the TRIUMF kaon project. The TRIUMF kaon project represents

enormous potential for Canada in seven separate areas of technology. It

represents new advances in industry and medical science, and it

represents new jobs and quality opportunities for British Columbians

and indeed all Canadians.

I wish to turn to an issue of

interest and concern to all members on both sides of the House. This

issue is one of great importance to me personally, and that is the

relationship between the public's right to know how public funds are

expended and the need to protect the confidential nature of companies'

proprietary information.

I have been a small business

person, and I know that there is some information that you wouldn't

want in your competitors' hands. But also being in government, I

strongly believe in the public's right to know. One of the ministry's

primary objectives is to encourage businesses to locate or expand in

British Columbia or to diversify our economy. To do this we provide

financial assistance at the margins, which is often called gap

financing. Sometimes this is done to preserve jobs and sometimes to

attract investment when we are in competition with other jurisdictions.

Let

me state that we have sought to stop this type of jurisdictional

competition, but other jurisdictions refuse. Therefore, in competing

with other jurisdic-

[ Page 11050 ]

tions, often we are not playing on a level field. Other jurisdictions offer much more, so we enter this fray.

But

we do so in a very fiscally responsible and prudent way. We provide

only the assistance required by necessity. When I became minister eight

months ago, the disclosure practice of the ministry was generally

limited to the following: the name and nature of the firm's business;

the principal amount of the loan or loan guarantee; and the description

of the project. Justification for nondisclosure of detailed information

about the project was the protection of the commercial interests of the

applicant. I might add that commercial lenders generally provide far

less information. But I did not find this to be an acceptable degree of

public disclosure. As a first step to resolving my concerns, I

instructed my deputy to review the practice, both federally and in all

other provincial jurisdictions.

Some jurisdictions have

legislation dealing with freedom of information; some do not. In

jurisdictions where legislation exists, such legislation contains

sections that prohibit the release of information that might prejudice

the competitive position of the third party. Indeed, the private

member's bill introduced by the member of the opposition from

Burnaby North both this year and last year recognizes this issue and

provides similar exemption. I would refer the members to

section 4 of

that bill.

With this in mind I instructed my deputy to

canvass a body of experts to seek their views. A report was prepared.

The experts were: John Fraser, partner with Peat Marwick Stevenson and

Kellogg; Stuart MacKay, principal with Peat Marwick Stevenson and

Kellogg; Robert Gourley, partner with Deloitte and Touche; Bill Miles,

partner with the law firm Ladner Downs; Mark Wexler, professor of

policy analysis at Simon Fraser University; and Al Kanji, partner with

Peat Marwick Thorne.

The one direction provided by my

ministry to the experts was to move toward a more open approach. I'm

willing to provide this report to all members of the Legislature. I

provided a copy to my critic yesterday. The findings are unanimous.

They divide the information into three categories. For ease of

discussion the experts called these categories white, grey and black.

White

information is information that should be released, and it contains the

company name and business, description of the project, loan purpose,

total cost of project, amount of assistance and the type of

assistance — either loan or loan guarantee.

Grey

information should be released using discretion and after agreement to

do so is obtained from the proponent. Included would be information on

quantitative measure of benefits, qualitative information of benefits,

economic costs and net benefits and terms of the loan agreement.

Black is proprietary and should not be released under any circumstances. This

includes the legal agreement itself, marketing, financial and other company-supplied

information, external and internal reports and correspondence.

this point I need to explain to the House that the legal expert pointed

out that, based on the guidelines in existence when I took over this

portfolio, in his opinion it would be unlawful to now release data on

existing or past loan or guarantee transactions. In his view the

ministry could be in legal jeopardy if it released any information

except the name and nature of the firm's business, the principal amount

of the loan or loan guarantee and the description of the project,

unless the proponent had agreed to more information being released.

deputy requested clarification of this point, and our legal expert

confirmed his view. I requested my deputy confirm this opinion further

with staff of the Attorney-General's ministry. While they generally

concur, they point out that some statutes require specific

disclosure — for example, the Auditor General Act, the

Constitution Act and the Financial Administration Act. Of course, we

intend to fully recognize these authorities.

I looked at

having staff contact all former business cases with a view to

negotiating the release of more information. This remains an option.

However, in a practical sense, this doesn't seem workable at a time

when our new programs are proving so successful that staff resources

are being stretched to the limit delivering them.

I will

now briefly return to the broader freedom-of-information issue. In

addition to my request for expert opinions, I requested that my deputy

obtain the assistance of the ombudsman. This was done with the general

direction I provided. I will quote one paragraph of the letter from my

deputy to the ombudsman:

"The minister is

satisfied and staff concur that the onus must be on the project

proponent to prove the need for commercial confidentiality at the time

of application or at the time of finalizing an assistance package. This

means that only the third category of information would be protected

once revised ministry guidelines on access to information are in place."

Further,

my deputy asked the ombudsman's assistance in helping my ministry draw

up appropriate guidelines. To date the ministry has not received a

reply. However, it is interesting to note the ombudsman's comments in

the 1989 annual report to the Legislature:

"As

a general principle, public information should be available to the

public. Exceptions should be few in number and subject to discretionary

disclosure if there is no reasonable expectation that harm would

result. Trade secrets or confidential business information should be

exempted from disclosure, except where specific information is

severable, or when the public interest regarding health, safety or

environmental protection overrides private commercial interest."

can tell the House the following: developing the guidelines for release

is my number one priority, and I am hoping that they will be in place

by next month. The guidelines will considerably expand our present

practice. Indeed, the onus of confidentiality will be placed on the

proponent to prove the reason for not publicly releasing the

information, while recognizing some items are and must be confidential.

[ Page

11051 ]

Utilizing the expert adviser's analogy, I expect that in nearly

every case the white and grey areas will be released. Only the narrow

band of clearly proprietary information will be held in absolute

confidence in the future.

[2:45]

close, I want to say that I'm very proud of the work of British

Columbians in diversifying and strengthening our economy. The

government and my ministry have been working with people of this

province to create the British Columbia economy of the future —

people from our small business sector and local and regional

governments. We've been consulting British Columbians from all walks of

life, listening to and acting on regional concerns and priorities,

giving people better access to government services and information, as

I've made clear today.

The accomplishments of this ministry

are numerous and significant. In fact, the ministry has on two

occasions within the last year been recognized for its outstanding

service. The ministry was awarded the B.C. Telephone quality service

award for the efforts of the government agents branch. This is the

first time the award has been received by the public sector. My

ministry also received the "project of the year" award from the

international Project Management Institute for our work on the medical

cyclotron project at TRIUMF.

The Ministry of Regional and

Economic Development is all about creating a climate for British

Columbians to grow in, to compete with the best in the world and, most

of all, to succeed in a rapidly changing world. Thank you.

MRS. BOONE :

I don't think I can begin this discussion on this ministry's estimates

without going through a little bit of a history in trying to figure out

what's going on with this ministry.

In 1988 the program was

announced whereby we had the ministers of state and the

decentralization process that the government was talking about. At that

point we had established eight ministers — eight states — and there was a lot of controversy over that.

you will remember, the New Democratic Party opposition were opposed to

this. We believed that you were instituting another level of

bureaucracy. We believed that it wasn't necessary to have eight

ministers or the new states; we could achieve regionalization without

that.

After that, they still had the eight states but we

got down to five ministers. They combined the regions and had some

outrageously large areas, such as the minister responsible for the

northeast

section of the province also being responsible for the

Nechako; how they thought that minister could be responsible for that

huge area I don't know.

They have finally got it down to eight states and no ministers now. I think

this is a clear indication that the government has worked their way down to

realizing the error of the original state system — or the minister system —

and has come to accept the policy the New Democrats had that we didn't need

those extra ministers at all and we could achieve regionalization without those

ministers there.

saw at that point that we had no direction for those ministers. We had

ministers running around handing out cheques. That seemed to be their

uppermost job: coming into various areas and handing out cheques for

things. Numerous committees were set up throughout the province with

mandates to work on any number of different projects. But those

mandates often were in conflict with the line ministry and often

duplicated work that was done by those ministries.

It is

clear the whole process did not work, and the government has finally

backed down and come to acknowledge that we really didn't need those

eight ministers there at all.

If the government was serious

about regionalization and about decentralization, they would have given

the power to the people in those regions. I have said this for three

different years. We already have existing boards. We have school

boards; we have regional district boards; we have municipalities. Each

and every one of those bodies could manage things and give input.

Instead we create another level of bureaucracy to do those things.

Giving

them power doesn't mean just saying: "We want you to do something; we

want you to come and talk to us." It means giving them the power to

have some money to do something. He who holds the purse-strings, as you

know, controls what happens. And you have not given any of those

regions access to that power. You have said: "We want your input, but

we are not going to give you any of those moneys."

I have

been trying to track down the mandate and the role of this ministry,

which is very difficult to do, since they change every year. You never

know where the programs are. You never know if the programs are

developed. Programs fold; they change names; they change mandates. You

don't know who is responsible for any number of different things. In

your regions you've got people never sure.... I'm sure that within any

given period of time in my office we've got people coming in to say:

"Where do I go?"

I do commend you on your access centres,

because I think they are good and give us a focus. As an MLA I can say:

"Go to the access centre, and I am sure they can give you information."

However, we have regional development corporations, access centres,

enterprise development corporations; that's only on our side. On the

federal side you've got all these other areas. The general public are

just so confused they don't know what's going on.

think it's clear that the Social Credit government's plan for

regionalization and decentralization — aside from the access

centres, which I like; but that other whole area — has

failed. It has not worked, I will quote for you, Mr. Minister, from

B.C. Business, July 1990, which shows that the objective of the

ministry to regionalize and diversify really has failed dismally:

"Sustained or not, economic development in B.C. has two

distinct arenas: the lower mainland and the

[ Page 11052 ]

rest.

The B.C. Central Credit Union worries about the next recession's impact

on the regions. The Central's newsletter, Economic Analysis , recently

looked at the degree to which a lower mainland economy, with about half

the province's three million residents, is more diversified, less

resource-industry-reliant and more service- and export-oriented than

other areas. In the next recession, the regions will suffer relatively

more, as 'the costs of an undiversified economy are expected to worsen

in coming years'."

That was a warning from the newsletter

of B.C. Business. This is after two or three years of what you call

"regionalization and diversification."

We're saying that

we're no further ahead. We haven't diversified. The regions are still

at the mercy of the marketplace out there, because they're still

resource-based and we haven't managed to do any of those things. That's

really quite a shame, because we are seeing that coming around. My

region, of course— and perhaps yours, Mr. Minister — has a heavy

resource demand, and without that resource economy....To this day if

the forestry industry goes down, so goes our community — it does not matter —

as does the community of the member for Alberni (Mr. G. Janssen). We've

gone through some good years, but things are starting to slow down and

people are a little worried about that right now. The only thing that

will hold us through is the thought that we are getting our university

there, which will be bringing in some moneys. Other than that, there

are still many communities throughout the north, throughout the

Kootenays, that are entirely dependent on resources and will fold if

there is a change in the resource economy.

The government

doesn't seem to be able to understand that regional development

requires giving the region the power to make those decisions. I think

that's what we have to do. We've seen states being created, and we now

see that we've got a new board, and the board is merely made of up of

all the people who were previously the ministers of state — just

sort of a shifting of the roles over there. You say that this new board

ensures that individual regionally based projects are brought to the

forefront and completed on a timely basis. I thought the ministers of

state were supposed to do that. They weren't able to do it. Why do you

suppose...?

Interjection.

MRS. BOONE :

Well, the ministers of state are now renamed this new board; they're

called a board. This board is supposed to have access to cabinet and do

all kinds of wonderful things — get things moving. It hasn't done it,

Mr. Minister. You need to give the people out there in the regions the

ability to make decisions for themselves and the ability to make those

decisions with cash in their pockets. You have to give them some

ability there. They can't do those things otherwise.

I've got a little note here: access centres. I do congratulate the government

and your staff, because I think you've got top-notch staff working in those

access centres, and they do give good service to the public.

There

is something that you never mentioned, and something that I don't think

any person in regional development can fail to mention: land use

conflicts. No regional development can take place in this province

unless the land use conflicts are solved — unless we develop a

process for dealing with those conflicts. We've seen nothing take place

to deal with those things, to give the communities in those areas the

ability to make those decisions, to deal with the conflicts that are

taking place, in a non-confrontational way; to get people to sit down

and try to come to grips with the problems facing their communities, so

that you don't have environmentalists and natives and loggers at each

other's throats; so that communities are not divided; and so that you

can have some kind of development based on those things. Until we as a

population can do that, we are not going to be able to solve any

development things.

While we acknowledge the needs.... You

went on about the guidelines, and I do appreciate the minister giving

me advance knowledge of that information. We need the knowledge for the

guidelines and the information that can be brought in on loans, and we

appreciate that we should be getting more information there. We

acknowledge that there are some things that are confidential. We do

have some concerns about some of the processes there. I guess, should

we not be able to find out about the terms of the loans....

From

my information, it looks like you don't think we should be able to find

out about the terms of the loans. I think we should. What if a loan

fails? That brings into question the whole ability of us as an

opposition, or the government, or what have you, to question and to

find out what happened to that loan, and to assess the programs to find

out if they are good or poor or how they can be improved, or any of

those things. If we're not able to get that information after a loan

fails, after something has happened — a venture has gone under

— then that limits our ability to truly assess a project. We'd

like to see some kind of acknowledgment of those things.

It's

interesting that the minister brought it up that 50 percent of small

businesses are owned by women. I know it's true. You're saying that in

the future it will be. I know that most of the successful small

businesses are women-oriented. It's for a number of reasons that I

found out. They seem to be better planned; women take more time going

into things. Maybe it's our cautious nature. We also take less money

once we do have a business develop. We don't seem to jump into this

business and think that we can earn $40,000 to $60,000 a year.

Unfortunately,

what has happened is that we do have something else that's taking place

there. A lot of women in businesses are virtually poverty-stricken;

they're taking poverty wages in order to sustain themselves. We've got

a sort of low-wage ghetto created there.

[ Page

11053 ]

I'd like to question the minister now on a couple of different

things. My colleague who is our small business critic will also

participate in this area.

[3:00]

First

of all, before I get into that, in the special report of November

1988.... There was a special report, and the government talked about

its regional development initiatives. You said: "The regional

development initiative is guided by five basic principles. Government

will maximize the creativity, knowledge and energy of all British

Columbians in developing and implementing policy." Sounds good. I don't

know whether it is actually happening or not. "Local governments,

boards and commissions will be given greater opportunity to contribute

directly to the development of provincial government policy and

initiatives." I really have to question that. Where was the input from

the school boards when it came time for the referendum process? Where

was the input from the school boards into the government policy

decision-making process at that point? They weren't there.

Where was the input when it came time for a decision on the cancer clinic, for example — the

decision to put in two cancer clinics against all information that came

out from everybody around, including the Cancer Control Agency? Where

is the input that is taking place? I don't see it taking place any more

now than it did in the past. I really don't think that that is taking

place whatsoever.

I'd like to question you a little bit

today about some of your small business programs, because you did

mention the new ones. You gave me some information on previous loan

guarantees, and I thank you for those. What say did the regions have in

the existing loan guarantees? By what process were they developed? What

moneys did they come from? To tell you the truth, I've been having a

heck of a trying time to track where the moneys came from. It's the

seed capital program, isn't it? I'm wondering how much was budgeted in

each of the regions for those seed capital projects.

I've

been unable to track that stuff down and find out in the books. It's a

good way to keep your critic a little confused —

changing all the programs and the ministries and moving the budget from

place to place. I think you've got the deputy confused too, haven't

you, Mr. Minister?

How much was there initially? We've got

how much was lent. I'd like to know what the budgets were, and if they

overspent their budgets or spent the amount of their budgets.

I'll sit down and let the minister reply.

HON. S. HAGEN : First of all, I'd just like to reply to a few of the comments that the member for Prince George North has made.

I'm really pleased that the member — and I assume that she is speaking

with the approval of her caucus — is finally recognizing the fragile nature of

the economy of the province of British Columbia. She referred to her region

and my region, where indeed we are dependent on the resource sector. But I can

tell you this: she pointed to an article; I can point to many articles that

state that because of the amount that the province has diversified its economy,

many economists say that we may not be hit as hard by a recession as we would

have been. However, as one who has studied a bit of economics, I know that for

every economist who has one opinion, you can find another who has another opinion.

So I'm not sure that that point is worth arguing or carrying on.

The

member talked about land use conflicts. There isn't another government

in Canada that has done as much on resolving land use conflicts as this

government has. We established, first of all, the Clayoquot Sound task

force to deal very specifically, in a specific part of the region....

MR. G. JANSSEN : Tell me what they resolved.

HON. S. HAGEN :

Talk to the members, Mr. Member for Alberni, and you'll find out what

they are resolving. They're still in place. They're still holding

discussions. They're not fighting with each other. They're working out

their differences — without Big Brother government coming in and

imposing something on them, which I know is what the members opposite

would be in favour of.

The second major step we've taken is the creation of the Round Table on Environment and Economy.

MR. CLARK : More government.

MR. S. HAGEN : Do you call Ken Georgetti, for instance, more government?

This

Round Table, Mr. Chairman, is a very significant and important task

force dealing with these very important issues. I agree with the member

for Prince George North that they are important, and we are dealing

with them. We have brought all the groups to the table to discuss the

issues and advise government on policy. So she cannot say we are doing

nothing. We have brought very representative people to the table on

both of these task forces.

I want to thank her for the

constructive suggestions she made about access to information. We have

made note of those recommendations, and if you would like to confirm

them in writing, we'll take them into consideration when developing the

policy. I say that in all sincerity.

With

regard to your

comments on regionalization, I knew that you would be saying something

and trying to belittle the process. But I can tell you — and you should

know this, because you attend the meetings in your own region —

that there are people all over this province who are very pleased with

the process, who have never had as good access to government, who have

never had the input to government that they have now.

challenge you to talk to people like Mayor Al Huddleston of Port Hardy

or Mayor Don Lockstead of Powell River. Ask them how they feel about

the regional process. I know they like it, because I've spoken to them

myself. They think it's a great way to get input. They work with their

MLAs, which is very

[ Page 11054 ]

important,

and I know the people on the Cariboo regional task force work with you

and the other MLAs up there to have their concerns taken to government.

You

asked a specific question about something that took place two years

ago, I think, about loan guarantees by the regions. I am told — and this is one or two budgets ago, I guess —

that the amount budgeted for this program was $50 million over the five

years and that it is a bad-debt provision. In other words, if an amount

is written off, it will come out of that amount.

MRS. BOONE :

What I'm looking for is some information on how much it is for each

region. For example — and I think this is indicative of some of the

things I've been talking about — you've

got the lower mainland southwest badly in need of development money, I

would say, which has more than $1,338,000 being spent in it; and the

northeast region, which has $20,000. There are some real discrepancies

here, and surely if we're looking at regional development, then the

reverse should be true. We should be making money available to those

areas outside the lower mainland and not necessarily to the lower

mainland. How much of that $50 million is divided up, and how is it

divided between the regions, or is it just a pot that everybody goes

into, and whoever applies may apply from it?

There were

indications in the past that there was input from the regional minister

of state on that approval process. Is that still in place? Do they go

through the board now? Who makes the decision on what is in the best

interest for the region?

[Mr. Ree in the chair.]

HON. S. HAGEN : The

program that the member for Prince George North is questioning

apparently ran for 15 months and did not work as successfully as it was

hoped. When I became the minister, I asked the staff to take it apart

and see what was good and what was bad about it.

We also

had the Task Force on Small Business that was commissioned. It was made

up of people from the regions and also from small business. We took

their recommendation that the program we had just put into place — the business start-up program —

be administered by the banks and the credit unions. The information on

the program is available at the banks, credit unions, chamber of

commerce offices, MLAs' offices and the regional development board, if

there is one in a community. The information is readily available.

When

you consider that the brochures have only been out about two weeks, the

response has been absolutely overwhelming. It's a very simple program

to understand. If you want to start up a business, the steps are pretty

easy. The banks are on-side. The banks are participating and are

administering it.

MRS. BOONE : I'm pleased to see that the minister said that the seed

capital program didn't work, because it was a point I was going to make.

It didn't work, and the financial institutions were not participating in

it for various reasons. I've had that told to me over the past year or so.

I brought that up last year. It didn't work because of the paperwork that

was involved in some cases, and also because they were looking for a 100 percent

guarantee. Does this new program now give a 100 percent guarantee on those loans?

HON. S. HAGEN : Yes, the program is a $15,000 guarantee on a $15,000 loan, so it's a 100 percent guarantee.

MR. G. JANSSEN :

Now the minister says that there's $50 million for a five-year program.

If we look at the numbers he supplied to the critic — the MLA for Prince George North —

we've used $3,531,000 for 98 loans in a one-year period. That leaves me

to believe that if you keep up this kind of pace, you are not going to

even utilize a third of the program, $15 million out of the $50 million.

The

discrepancy is also that the lower mainland has $1.3 million, while at

the other extreme the northeast, as the member for Prince George has

indicated, has $20,000. That indicates to me that the programs are not

working in a very equitable manner in the province. Certainly

government should serve the people of the province equitably.

know there are not as many people living in one area as there are in

another, but as single-industry, resource-based communities tend to

modernize their facilities — as has been the case — we see this

influx of people leaving these single resource-based communities and

moving to the centres of Vancouver. We see massive price fluctuations

in housing and in various other costs, many of which impact government,

of course.

I'd

be interested to know, through the fabled

board that replaced the ministers of state, if we are now going to

reach out from the lower mainland and encourage people to move back to

their communities, give some incentive for the government to create

some infrastructure, give some loan guarantees and actually encourage

those businesses to move out. This isn't the heavy hand of government

working here. This is trying to do away with the two economies that are

starting to develop in British Columbia: one that is very effective in

the lower mainland, where the unemployment rate is very low; and one in

other parts of the province — I'm sure the minister is

aware — where the unemployment is very high and the economy is

very sluggish.

HON. S. HAGEN : I appreciate the member for Alberni using the question that I gave him, because it will give me an opportunity to respond.

The

business start-up program provides, for a $15,000 investment by an

individual — or where an individual has $15,000 worth of capital —

a $15,000 loan guarantee, which gives an equity of $30,000. That's in

the city of Vancouver.

[3:15]

[ Page

11055 ]

If you are outside the city of Vancouver, you only have to put up

$7,500 worth of capital to get the $15,000 loan guarantee, and it's

specifically designed that way to assist communities that are outside

of Vancouver.

On the second program, which is the small

business assistance program, there is also a regional part. The direct

loans work this way: low-interest loans up to 50 percent of eligible

capital costs for a maximum loan of $500,000 and for a term of up to

five years; interest on the loan will be at 6 percent per annum. This

is not news, by the way. These are on the brochures that I think you

have in your offices.

Outside

the GVRD, the first $100,000

of the loan will be interest free, so again it's designed to assist

businesses outside the greater Vancouver area, and I'll tell you why.

I'm sure you know this, but I'll tell you why anyway. Banks look at

assets differently in Vancouver, the lower mainland or in smaller

communities, and I see a nodding of agreement. I'm not being facetious

in what I'm saying; it's just that it's a common known fact. The banks

will look at an asset — a building in Merritt, as an

example — differently, with a different value if the business is

shut down, than a building in Vancouver.

With

regard to loan guarantees, the province will provide a guarantee of up

to 75 percent of the loan to a maximum provincial liability of

$100,000. Outside the GVRD it's 85 percent. Without getting into

specifics, the third program — the business expansion — has

the same basis to it. For communities outside the GVRD, there is better

leverage and more comfort to the banks to offer those people a level

playing-field, or the same opportunities that are available in the GVRD.

MR. CLARK :

I am interested in several questions regarding the specifics not of

what's contained in the package, but what it's going to cost us. Maybe

there are some obvious questions that come to mind, given your answers.

How

much is the total interest subsidy budgeted for in the next fiscal

year? You must have an estimate or a maximum. Let me put it that way.

You have a maximum number of loans you can lend out at 6 percent in

order to reach your maximum budgeted figure and a maximum of loans at

zero percent interest. In other words, that's a cost to the province,

and I'm interested in what that cost is. I appreciate it might be

difficult to estimate precisely what the cost will be, because you

don't know how many loans you're going to give out. Surely you have a

maximum budgeted number which you can't exceed.

How much is

the total quantum of loan guarantees that you can issue? In order for

you to answer that question, I assume you must have an estimated

default rate. I'd like to know what the estimated default rate is, and

how much you have budgeted for in terms of contingency funds in order

to pay for that estimated default rate. Presumably the contingency fund

that you have, combined with the default rate, will give you a maximum

amount of money that you can lend out this fiscal year.

I'm interested in those three questions in addition to the direct interest subsidy that you have under different programs.

HON. S. HAGEN :

I may have to get you to repeat some of those questions, but in answer

to your first or second question on the amount of loan guarantees that

we're allowed to do, we budget an amount for bad debts. I believe that

the percentage we have experienced is something like 8 percent or 9

percent....

I am told that the amount of bad debts that we

have experienced is substantially lower than 8 percent or 9 percent,

and I understand it's an average of all the programs.

Also,

the amount that we have provided in our budget for bad debt provisions

for all three programs is $11,525,562. That's all three programs, but

because of the rules of the auditor-general, it is a provision for some

of the old ERDA loans as well. It's very difficult for me to break it

out because they work on a percentage that we have to put into our

budget to satisfy them — them being the auditor-general — to

make sure that we have enough for write-offs each year. But my

information is that we have not used that, which leads me to think that

maybe we have not been flexible enough in the past. If we're going to

be sort of a lender of last resort, we should probably have a higher

write-off rate than the banks do.

MR. CLARK : Having

said that, I guess now that you're using the banks and credit unions

more to vet the loans, that makes sense in terms of them sharing some

of the risk. They still have to go through the same tests.

However,

let me just get it right, because presumably, if you budget $11 million

for contingency, you must know as a ministry how much you can lend out

or can guarantee before you get into a critical phase there. Very

crudely, if you've got an $11 million contingency, it seems to me that

you're looking at about $100 million in loan guarantees. If you had an

11 percent default rate, presumably that's somewhere in the magnitude

of $100 million in loan guarantees that you can issue safely with an

$11 million contingency. Do you have a number, a total? I'm not saying

you're going to reach it necessarily, but what's the maximum?

HON. S. HAGEN : Okay. Those are good questions, questions I didn't anticipate.

the first program, the business start-up program, which is the $15,000

one, we have budgeted for $6 million in loans from now until the end of

this fiscal year...

Interjection.

HON. S. HAGEN : Loans. That's how many guarantees.

...and

$12 million for the following fiscal year. Okay, it's $6 million to the

end of this fiscal and $12 million for the next fiscal. So the budget

for bad debt

[ Page 11056 ]

would be about 25 percent of that. That's what the auditor-general forces us to set up.

the second program, the small business assistance program, it's $30

million worth of loans over two years; and on the third one, the

business expansion, about $30 million over two years.

MR. CLARK :

With respect, it's rather modest, frankly, but I suppose it's the

start-up program, and after we get elected we can expand it rather

easily.

There's another question there that the minister

hasn't answered yet, and that is the direct subsidy, the interest rate

subsidy, which is separate and distinct from the loan guarantee. There

is a 6 percent interest rate, so presumably there's roughly a 6 percent

subsidy for the lower mainland and a 12 percent subsidy, or whatever,

outside. What is budgeted for the actual subsidy that the government is

anticipating providing in the way of write-downs of interest rates?

HON. S. HAGEN :

I'm told first of all to clarify that on the loan guarantees, of

course, there is no subsidy amount, because it's at a prime-plus-one

rate. On the loans— and I understand what you're asking: the difference

between the 6 percent and whatever the market rate is — we do not

budget on that basis for that difference.

MR. CLARK :

You must budget for that, because, with all due respect, you have to

have an estimated cost. What's the cost to the treasury? Or what is the

maximum amount that you can write down in order to not exceed your

budget? You must have a budget, because these are cost items. They're

not even like loan guarantees where there is a bad debt. These are

actual costs to the treasury, because the treasury is borrowing money

at a certain rate and lending it out at a lower rate or at no rate.

There must be an estimated cost in your budget to cover that.

HON. S. HAGEN : That's just being worked out now. The problem is that the question you're asking is not split out in the estimates.

MR. CLARK : That's why I asked.

HON. S. HAGEN : We're just working that out.

The

second member for Vancouver East asked a question with regard to how

the bad debt amount was established. I can inform you that the input

comes from the auditor-general, the staff of the ministry and the staff

of the Finance ministry. Through a consensus of those three, the best

estimate of the dollar amount is made up. Then we put that into our

budget as the amount that is available for write-offs. We have no way

of knowing whether that will be used up or not.

MR. CLARK : I just have one more question. The government borrowing power

is immense, and better than my personal borrowing power. Therefore the interest

rate that the government borrows money for is less than the interest rate than

the average citizen can borrow. I wonder whether the subsidy is determined by

the difference between the government borrowing rate and the government lending

rate in terms of the 6 percent or the zero percent, or whether it's the

market rate used in terms of the prime rate or the prime lending rate, or prime

plus 1 percent. I'm just interested in whether it's an actual subsidy

based on the borrowing cost incurred by the province, and what that interest

rate is. You have said 6 percent and zero percent. You give a fixed number,

and of course the interest rate is not fixed to the Crown, so the subsidy goes

up as the interest rate goes up. I'm just curious as to whether it was the

actual cost of the borrowing of the province.

HON. S. HAGEN :

Mr. Chairman, through to the member for Vancouver East, it's the

difference between the 6 percent and prime — the bank rate, not what

the province borrows it at. The reason is that the loan comes from the

bank in the case of the second program. The company goes to the bank to

borrow the money after the first $100,000.

MR. CLARK :

I won't pursue that, but it is an interesting question. I've always

been intrigued by the notion of using the borrowing power of the

province to effectively lower interest rates at no cost to the taxpayer

for, perhaps, business lending. It's an idea which I think has some

merit. Alberta has treasury branches and can perform that function more

easily than British Columbia.

What you have done is let the

banks determine the lending, and in some ways you are subsidizing the

banks, when, in fact, the borrowing rate for the province is

significantly lower than the bank rate. Therefore you could borrow

money at the provincial rate, in turn lend it out and either reduce

your subsidy costs or have no costs to the taxpayer and still provide a

bit of a break. I am disappointed, frankly, that the government is

choosing this route when I think there is a more cost-effective

approach.

[3:30]

MRS. BOONE :

As I mentioned before, I would like to know how the regions play in

this area. You have moneys available to guarantee loans. Is there any

division of this money on a regional basis, or so the boards have some

kind of a say?

How can you prevent some of the inequalities

that take place? For example, the information that you gave me out

of.... They've got 36 applications coming from the lower mainland, down

to one coming from the northeast. How do you propose to promote the

regions when anybody can apply for that funding? Obviously the lower

mainland people are going to be the main ones with their hands out, as

they always are — the business is there.

How do you

promote the regions and make sure it is divided equally? What say do

the regions have in determining whether a project is a good project or

not?

[ Page

11057 ]

HON. S. HAGEN : Before I answer that, I just want to read some

facts into the record here on the project funding from October 1986 to

March 31, 1990. I will list the programs with the percentages that went

into the regions instead of into the mainland. I think you might find

it interesting.

The

COED program — 73 percent of the

moneys went into the regions, so 27 percent went into the lower

mainland; the small business venture capital program — 33 percent

went into the regions and 67 percent went into the lower mainland; the

industrial development subagreement — 50 percent went into the

regions and 50 percent into the lower mainland; the small business

incentive subagreement — just

over 25 percent went into the regions and 75 percent went into the

mainland; financial assistance outside existing programs — in

other words, the ones that were done on an ad hoc basis and approved

outside the programs —78 percent went into the regions and 22 percent

went into the lower mainland; regional seed capital program — 63

percent went into the regions and 37 percent into the lower mainland;

the tourist industry development subagreement, which is no longer in

place — 58 percent went into the regions and 42 percent went into

the lower mainland.

direct answer to your question —

because this is obviously what has driven me, the ministry and the Task

Force on Small Business to make the recommendations that they

did — was to put a regional emphasis onto the programs, which is

exactly what we have done.

In other words, we have different matters of assistance — either loans or loan guarantees —

for inside or outside the lower mainland. That's how we expect.... Bear

in mind that more than half the population is in the lower mainland, so

obviously if you have 50 percent of the population, the chances are you

will get 50 percent of the applications.

What we want to

do, in order to increase the diversification and give people in the

regions at least an equal opportunity, is regionalize the programs — which

is exactly what we've done. I think by the results of the first

month.... I announced these at the end of May when I was at the chamber

AGM. We didn't even have the brochures at that time. I have been

speaking at chambers at various places throughout the province. The

request for applications for these programs has been very brisk,

particularly on the business start-up program. These brochures have

only hit the banks and the credit unions, in some cases, in the last

week.

It is still fairly new, but my staff tell me the

reception has been very good by the chambers of commerce, the small

business task force members and the Canadian independent business

organization I don't think we've had a negative comment, as a matter of

fact, on the programs.

MRS. BOONE : As I asked before, the regions.... The minister of state

had a hand in the regional seed capital program and in determining what was

acceptable and which ones would go forth. Is there any input from the board?

I don't know what you call yourselves now — the regional development board

or the new old boys' club of the ex-state ministers. Have you got a pin

yet for these guys — the ex-ministers of state? I think probably you should

get one. Is there any input from these individuals from the regions into what

is an acceptable or advisable program, and which one should be approved or not

approved?

HON. S. HAGEN : If you are asking about the business start-up program — the one administered by the banks —

those decisions are then made by the banks. You would go into the

credit union office and say: "I've got an idea. Here's my business

plan. I want to go into business." The bank looks at it, goes through

the process and fills out the form. If you are outside of Vancouver,

you must have the $7,500. Then you get the other $15,000 with our loan

guarantee.

MS. MARZARI : I'm looking at vote 57 here, and I'm tallying it up. It's $73 million or $74 million. Am I correct?

Interjection.

MS. MARZARI :

I'm looking at the estimates book. Your total budget is $73.8 million.

Basically what you've done today is unveil a total program which takes

us into over $100 million worth of loan guarantees and of different

programs. Am I correct? I see $30 million for the business expansion

program, and the small business venture capital program, $30 million.

Am I right? The start-up program is $6 million this year and going to

$12 million next year. Am I right?

HON. S. HAGEN :

No, with all due respect, the loans will not show in the budget,

because the loans are not an expenditure. Only the write-off portion

will show in the budget.

MS. MARZARI :

So the three programs that you've been addressing — the start-up,

the small business venture and the business expansion programs —

do not really appear anywhere except for the write-off provision of

$11,525,562; that's very specific, Mr. Minister.

Then

the other programs that are outlined in the estimates book — economic

development, business development and regional development — are all

separate programs aside from these small business programs you've just

announced. Vote 57 breaks down into economic development, business

development, regional development and reserves for doubtful accounts.

Now we've covered that $11 million reserve that we're going to kiss

goodbye to because we believe in small business and high risk.

Interjection.

MS. MARZARI : Yes.

MR. CHAIRMAN : Order, please. Possibly the member could direct her questions through the Chair.

[ Page 11058 ]

Then when she's finished the questions, she could sit down and allow the minister to answer and not question directly.

MS. MARZARI : Yes, through you, Mr. Chair.

HON. S. HAGEN :

Yes, the amounts that you read off — the regional development, business

development, economic development and government agents — are all

separate areas of the budget.

While I'm standing, I will

answer the question that was asked by the second member for Vancouver

East on the small business assistance program, which is the one that

has the loan subsidy in it. It's expected that over two years we will

do about 150 deals, and the cost to the Treasury would be about $1.2

million, assuming the average deal would be about $200,000.

MS. MARZARI :

I take it there's no federal involvement here. There's no recapturing

or ERDA involvement here. We're saying goodbye to ERDA. That's sort of

pulled out. I can see in the estimates that you are not really counting

on the federal participation here at all. This is all provincial

dollars we're dealing with and its provincial subsidy, Mr. Chairman.

have a second question then. As you take these provincial dollars

through the banks to the local regions, it seems to me by your answer

to our critic on economic development that you don't have regional

criteria really developed when it comes to going to a particular region

of the province that may be undergoing particular strife or bad times.

You haven't done an inventory. I'm asking if you have done inventories

of what exists in the regions and what they need in terms of capital.

Are you working with those regions? Do you have structures in those

regions — consultants, groups or chambers — that would assist you in

developing some very specific goals for each region in this province

and would assist the bank, credit union or whoever you are dealing with

in determining how much of a risk they are prepared to take when they

venture forth with their venture capital?

HON. S. HAGEN : The answer is yes. I would be pleased to

provide you with a regionalized view of the province — region by

region. I just want to add that there are times — and I guess the

example might be Kimberley — when something happens that really

shocks a community and is not anticipated by the community. What we

did, first of all, in Kimberley — and you are probably aware of

this — was to make them the ninth member of the Strong Communities

in the 90s list of winners for this year, because that's a competition

between communities. We had one winner from each region, then we added

a special program for Kimberley, just because of the state they were

in. It has worked extremely well. What I then asked my staff to

do — which they are working on now — was to prepare a plan in

case something like a Kimberley happened again elsewhere in British

Columbia. But in answer to your first question, we would be pleased to

provide you with sort of region-by-region capsule and analysis.

MS. MARZARI :

I don't know if our critic has asked for that yet, but I think it would

be very useful for this House to have the detailed breakdown as to the

criteria that are used when you move out to the regions, that will

establish how much money you're prepared to invest in a region; and

secondly, a careful listing of the priority businesses you might be

looking for in each of the regions. You, I gather, are still sticking

with the eight regions; you have a winning eight group that won by some

form of priority lottery, I assume, that you selected. There must be

some criteria by which you selected the winning eight. There must be

some criteria by which you're looking at each region and deciding how

much money to invest in it. Perhaps you could explain, then, how we go

about that.

[3:45]

[Mr. De Jong in the chair.]

HON. S. HAGEN :

I'm sorry if I've confused you, We're talking about two different

things here. I was talking about Strong Communities in the 90s, which

is specifically directed to a community. In the case of Gold River, for

instance, in region 1, they competed against maybe three or four other

communities and came in with the best proposal, so they won. But that

was a specific community within a region.

What I was

talking about was.... We have developed, through the Regional

Development Board and also through the ministers of state prior to

that, an analysis of each region as to what the strengths of the region

are and what the needs of the region are. That's what I said I was more

than happy to provide. We have not allocated an amount of money per

region. The money is there and will go out as the applications come in.

I don't know how else you would do it on a fair basis. I think it's the

job of the MLA. When somebody comes into your office — and they're not

as likely to come into an office, in all due respect, in Vancouver, but

certainly outside Vancouver — and says, "We want to know what

assistance programs the government has," I would hope you would hand

them a brochure and say: "Here's a program; you can go to the bank. Or

if it's a No. 2 or No. 3 program, we will assist you in filling out the

forms."

MS. MARZARI : Strangely enough, Mr. Chairman,

that doesn't really seem to happen so much in the opposition offices,

since the opposition offices traditionally haven't been particularly

well informed about these programs. Traditionally, if I may say, many

of these programs have been fed and nurtured out of the hip pockets of

the ministers involved. That is one of my concerns. The parliamentary

undersecretaries that were out there with their million-dollar setup,

and then up to $8 million each, have now been replaced, we hope, by a

responsible, accountable system brought into place by the new Minister

[ Page

11059 ]

Regional and Economic Development. And we are assuming now that with

the comprehensive system of loan guarantees and some venture capital,

you're doing a detailed and systematic prioritizing of regions and

communities as to the money they need and the capital you have for

matching businesses and ventures with banks and credit unions,

supplementing where possible with our own guarantees and possibly doing

what the second member for Vancouver East (Mr. Clark) has suggested:

using preferential rates which the province itself might be able to

extend, to carry those dollars a little bit further. We hope that that

might be the case.

My office does not deal with these

programs. My office has not really been brought up to speed with these

programs. I can only hope that these programs are not being funded out

of the minister's pocket, which brings me to my questions around

accountability. I have a number of questions around accountability. In

the last analysis, how do we finally tab these programs? As Chairman of

the Public Accounts Committee, I've had tremendous difficulty getting

into the intricacies of contracts, loan guarantees and special

privileges that have been awarded a number of small business throughout

this province. Various reasons have been given. For example, this is a

private contract, therefore you don't have access to the inner workings

of what their bottom lines look like. Even though public money is

involved, they have a private contract with government — an

inconsistency in my own mind, but that is an excuse which has been

given.

I would ask the minister where the buck stops when

it is time to go out and evaluate these loan guarantees, these

programs. Does that small business report back to you? Do you have a

clause in your contract which makes it possible for you to audit those

businesses? That's question number one.

Question number

two. When you step out into the community, using your bank, your credit

union, your own provincial dollars, do you have ceilings on the amount

of money which can be granted at the local level, without it coming

back to you or your deputy? And what are those ceilings? And do they

differ between types of businesses and types of projects?

Thirdly,

can we expect to see a detailed breakdown in your annual report of

exactly where that money has gone and how much has gone to each

individual business as part of the contract you might make with them,

so that in your annual report we will actually be able to see, region

by region, where the money has gone? Those are three accountability

questions.

HON. S. HAGEN : The quick answer is yes,

yes and yes. Yes, there is an audit clause in the contract. In the

second case, we don't give grants anymore. This ministry does not give

grants. These new programs are loans and loan guarantees.

MS. MARZARI : You give write-offs?

HON. S. HAGEN : We don't give write-offs. The only time a write-off occurs is if the business goes out of business.

Interjection.

HON. S. HAGEN : No, you don't wave goodbye to it at the end of the year; only if it occurs.

Number three: yes, the list will include the firm and the amount of the loan.

MS. MARZARI :

My second question had to do with the ceiling of allowable loan that is

going to be given at the regional level. Is there a ceiling? Is there

some kind of a level at which the minister is not involved? Under what

level of loan is the minister not involved? At what point does a loan

contract come to your attention or to cabinet attention?

HON. S. HAGEN :

The first program is the business start-up program I will not see

those, because they are done by the banks. On the second two programs,

every deal over $1 million must have an OIC by cabinet.

MS. MARZARI :

It doesn't come to cabinet until it's over $1 million. What about those

projects that might be $250,000, $300,000 or $500,000? Are they all

dealt with by the banks as well, or does your office or your agent have

something to do with them?

HON. S. HAGEN : They go to an internal credit committee made up of staff from my ministry.

MS. MARZARI : And you, the minister, wouldn't ask to take a look at items that are under $1 million?

HON. S. HAGEN : They come to me after they've been approved by the staff.

MS. MARZARI : For a veto, if necessary, but not necessarily a veto.

have made a contract, I think, that the minister will be bringing back

to this House a detailed breakdown on regional priorities. The promise

has been made that we'll have a look at regional priorities and

inventories and what kind of priorities the minister is giving to

different regions. I think you committed yourself to that about ten

minutes ago.

HON. S. HAGEN : What you've asked for are part of these guidelines, so I have no difficulty sharing that with you.

MS. MARZARI :

My last question, then, has to do with what priority the minister has

given to women's small business start-up and women's access to venture

capital. What we know through not very careful study is that it's very

obvious that women's access to capital to start up small businesses has

been seriously curtailed by sexism, basically, inside the banking

community, and by extra screening processes that seem to be applied to

women entering small business.

[ Page 11060 ]

Has

the minister developed special criteria, special priorities, around

women in the regions, or women simply as a group, moving towards

developing small business? And if you have a specific dollar amount set

aside for women, I'd be interested in knowing what it is.

HON. S. HAGEN :

First of all, I want to ensure that the members opposite have received

this kit. It was sent to all MLAs, so I would hope that you got the

kit. If you didn't get the kit, please check with my staff or me, and

we'll make sure that you get the numbers that you need. You can have as

many as you want.

With regard to your question, I'm sorry

that you weren't here a little earlier. I referred in my speech to the

significance of the business start-up program with regard to women. The

reason that this program appeals to me — and I think the appeal is

shared by my staff — is that it makes it possible for women to be

treated the same as men would be treated when they walk into the bank.

It's because of the government guarantee. There's no requirement here

for a spouse's guarantee or for credit or anything else. And if you're

outside Vancouver, you need the $7,500 just like anybody else. The

guarantee is there, and as I mentioned, the statistics are apparent

that the success rate of women in business is higher than that for men.

By the year 2000, which is ten years away, 50 percent of the businesses

in Canada will be owned by women. So one of the appeals of this program

is the fact that it would be attractive to women.

No, there

is not a dollar amount allocated specifically to women, but I expect

that over 50 percent of the take-up of this program will be by women.

MR. JONES :

I want to rise and pursue a particular issue with my old friend the

former Minister of Advanced Education and now Minister of Regional and

Economic Development, who, as is his wont, comes in and reads his

introductory remarks in estimates. Although the minister reads well, he

knows it's very boring in this chamber and maybe even out of order. But

my ears pricked up at one point — and it sounded as if the minister was

very keen on this

section as well — when he got on to the

section about

freedom of information.

I'd like to ask the minister a few

questions about this initiative. The first would be: could the minister

explain how what he described as the white category of information

differs from what is presently released and available in terms of

access to information?

HON. S. HAGEN : The

recommendation of this learned committee is that in the white

information normally accessible to the public, the company name and

business, the description of the project, the loan purpose, the total

cost of project, and the amount and type of assistance be given out.

I'm just looking to see what we presently give out. You weren't

listening, because I said it in my speech.

MR. JONES : You weren't listening either.

HON. S. HAGEN : I wasn't listening either.

I'm

really disappointed in the member for Burnaby North that he wasn't

paying attention, but let me reiterate. When I became the minister

eight months ago, the disclosure practice of the ministry was generally

limited to the following: the name and the nature of the firm's

business, or the company name and business; the principal amount of the

loan; and the description of the project. So the total cost of the

project is new. The type of assistance — loan or loan guarantee — is

new. The loan purpose is new.

MR. JONES : And total cost of project.

HON. S. HAGEN : And the total cost of the project — I think I said that.

I think there are six points in this recommendation, and three of them

are additional — or new — to what we are presently disclosing.

MR. JONES :

So this new bold initiative that the minister is excited about — and I

was excited about momentarily — is adding what I consider to be very

little to the public domain of available information. We already know

the company name and business, the description of the project and the

amount of assistance. So very little is being added. We know now

whether it's a loan or a loan guarantee, and I don't know what is so

significant about that. It seems that you're in the business of

providing loans, so that's really not new information. We're now aware

of the total cost of the project, and I think that's useful, but I

don't know why that information would not have been accessible in the

first place. And we're now aware of the loan purpose. I assume that the

loan purpose is for economic development in the province, so I don't

see a great deal of new information being provided there. What we're

dealing with is an incredibly conservative report in terms of making

information available to the public.

[4:00]

I'd

like to ask the minister a question. In the black-grey area — the area

that may or may not be available to the public — who is going to

determine whether this information will be made available?

HON. S. HAGEN :

First of all, let me say that after an agreement with the proponent is

made to do so, the grey information will also be released. The grey

information includes the following: qualitative information on

benefits, to be compiled in an information package; the quantitative

measure of benefits; the economic costs and net benefits; and the terms

of the loan agreement. All those things will be made available after

agreement with the proponent is reached.

And let me remind

the member from Burnaby North, who I know is very interested in this

particular topic, that I said in my speech that the onus of

confidentiality will be placed on the proponent to prove the reason for

not publicly releasing the information, while recognizing some items

are and must be confidential. So the onus will be on the proponent to

prove why we should not release the information.

[ Page

11061 ]

MR. JONES : So the real answer to my question is that, in both

the grey-grey area and the black-grey area, it really will be up to the

government to determine finally whether this information should be

disclosed.

For example, in the grey-grey area,

"quantitative measures of economic costs and benefits would normally be

provided unless disclosure may adversely affect the applicant in the

conduct of its business." So there's a caveat there. The grey-grey area

may or may not be disclosed, and in the black-grey area further details

of the agreement would normally only be accessible where the

applicant's business would not be adversely affected, and where the

information would not likely be subject to misinterpretation.

it's really going to be in the ministry's final determination whether

this information is subject to misinterpretation, whether the

individual's business is going to be adversely affected, or whether

it's going to affect the conduct of the applicant's business. So the

answer to the question really is that the ministry — in fact, the

minister — is going to be the sole arbiter of what information is made

public. Is that not correct?

HON. S. HAGEN : First of

all, let me say that this report is not the policy. We have not

generated the policy yet. We have asked the ombudsman for his help in

developing the policy. We asked these learned individuals from the

business community, the legal community and the business advisory and

academic business management community to give us their views. The only

direction that I gave them was a desire to move towards a more open

approach. We have had these opinions looked at by various legal

experts, and we find our legal experts to be in agreement with them.

What

I've done now is ask my deputy to write to the ombudsman to ask him for

assistance in developing the policy. As I said to your colleague — and I

know that you do have particular views on this — I would encourage you

to give me your views either today or in writing, and we will consider

them in developing the policy. But the policy is not in place. We have

asked for assistance from the ombudsman in developing that policy.

MR. JONES :

I've seen this exercise many times with this minister in another movie.

The whole process is that we have these nice committees and they come

up with nice reports. The initial reaction from the government looks

like: "We're really behind this report." I've seen this on a couple of

instances, and it's unfortunate that the minister didn't get to carry

on with these.

We'll take, for example, the Literacy Advisory Committee. That was a wonderful

report with wonderful recommendations which have totally been put on the back

burner and now are gathering dust on the shelf. The other one for native Indian

learners in the province was good work the minister initiated, but we didn't

have an election to shift ministers to do that. We had a cabinet shuffle and

not an election, so those things have basically been shelved. I'm a little

disappointed.

The

minister now seems to be saying: "This isn't policy." He talked

initially about white, grey, black, grey-grey-white and all these

things, as if he was really behind this. Now he seems to be divorcing

himself from this particular conservative report.

If the

minister wants to solicit my views, he can do what he's already done

and read my private member's bill on freedom of information. It's

pretty standard with freedom-of-information legislation across this

country and in the federal Parliament. It has major provisions for

protection of privacy. But it also has — and this is what the minister

seems to have difficulty with — appeal provisions. They all have appeal

provisions. My point on the minister being the sole arbiter is that the

crux of the problem is that information generated by the people's

government really belongs to the people. If for particular reasons the

government doesn't want to release information that really should be in

the public domain, then there is an appeal process that is the final

arbiter of what should or should not be in the public domain. It should

not be the Minister of Regional and Economic Development, clearly.

don't know whether the minister wants to answer any more questions

about this report, or whether he's disavowing support for it. Let me

ask one, and I'll find out. The real secret stuff, the black

information, is the loan agreement itself. On page 6 of the report, the

loan agreement is defined:

"The prime document emerging from a successful loan application

is the loan agreement. A typical agreement deals with the total cost of the

project, the amount of financial assistance, the purpose of the assistance,

clauses" — and I suppose those are performance criteria that are important

to the agreement — "as well as agreements to public announcement."

Most of that is really in the white area or the grey area. The total capital

cost of the project is already going to be announced. The amount of financial

assistance is going to be announced. The purpose of the assistance is going

to be announced.

What

isn't going to be announced and what is the big secret is terms and

conditions. I don't know why the repayment

schedule is such a big

secret. Covenants and default clauses are protections that I hope the

government is putting in in the public interest. Those are there to

protect the public purse, to protect the taxpayers' dollars that are

going into these loans, and I would think the government would be proud

to announce how they are protecting taxpayers' dollars. Agreements to

public announcements may be one that gets into the political realm that

the government would want to remain secret.

But the

report's own definition of a loan agreement sounds to be, by and large,

normal kinds of things that, in the public interest, would be made

available to the public. After all, we are talking about loans of

taxpayers' dollars. They have a right to know. I think they want to be

reassured that the

[ Page 11062 ]

government

is acting in their best interests and protecting those taxpayers'

dollars with the kind of detail that this report says should never be

made available to the public.

I wonder if the minister would want to comment on that.

HON. S. HAGEN :

First of all, I dislike your comment that I'm stepping back from this

report. If I hadn't wanted the report, I wouldn't have asked for it.

All I was doing was clarifying with you. You were treating this as

policy. I did not want to mislead you or have you misled into thinking

that the policy was in place. How could the policy be in place and I

ask your colleague for input?

I appreciate the fact that

you are very interested in this particular subject. We have been taking

down the concerns that you have. We have not developed the policy yet.

We are working on developing it.

With regard to the appeal,

it will probably end up being to the ombudsman in this case. I'm not

sure if that isn't the same as in the private member's bill you have

proposed. The appeal is not to the minister. The appeal now, as far as

I know, is to the ombudsman.

What we're trying to do is

develop a policy that goes as far as it can in providing information,

because the funds are public, while at the same time protecting the

proprietary rights of the company. It may well come to a point in a

deal that we're doing that the company doesn't want to do the deal,

because they don't want to disclose some things. Well, that's fine; then

the deal won't happen.

MR. JONES : I must admit that

I am pleased there are plans for an appeal process, because that is

central to the whole concept of public information. There are instances,

I'm sure, where there is information in a loan agreement that the

government, the ministry, may not want to be made public — who knows

for what reasons, and I don't want to speculate. Governments in many

instances, and perhaps in instances for good purposes, do not want

information made public or do not want information made public at a

particular time.

Let me back up to a question I asked

earlier. I fully appreciate the minister's comments about this not

being policy. What we have is a conservative study commissioned by

representatives of a couple of law firms, a couple of management

accounting firms and an academic. This is a general thrust that this

minister is interested in. There has been criticism in this area of

government loans that it is the public purse being used here and that

the public has a right to know more about it.

Does the

minister have an implementation plan? He said: "Here's the study. We're

talking to the opposition; we're talking to the ombudsman." When does

this happen? Keep in mind, too, that this is going to be the last full

sitting of the Legislature. So when is the public going to be informed

about these government loans? When is this information, in whatever

form, going to be fully available?

[4:15]

HON. S. HAGEN : As I said

earlier this afternoon, my deputy, under my instruction, has written to

the ombudsman. We are awaiting a reply from the ombudsman, which we

expect in the very near future, and I am told that probably four to

five weeks after that reply is received we will be able to put the

policy into place.

MR. JONES : Let me just wind up

with a few comments to the minister. Dr. Wexler, one of the members of

this project team that produced the report, suggested a few things on

page 8 of the document that I think are important advice to the

government if they are looking at this kind of open-government approach.

recommends firstly: "Do not try to use or employ freedom of access to

government legislation as a policy panacea, particularly if real and

basic priority inconsistencies exist in the body politic." It seems to

me that the author is suggesting that unless you're really serious

about the public's right to know and to access information that affects

their tax dollars, there are going to be a lot of problems with this

particular approach. I haven't sensed, other than in this particular

minister, any real commitment on the part of any member of the

government to proceed with the kind of political will necessary to

carry through a major policy change of this magnitude.

Secondly,

the author suggests: "Do not try, as I believe the briefing package

suggests, to implement the freedom of access to public information on a

piecemeal basis, to handle specific problems in a ministry." That is

exactly what this minister is suggesting to this House is happening at

this time. In one small area of government, the loan portfolio, we are

being treated to a very conservative approach to freedom of

information, totally against the recommendations of one of the authors

of this report.

The author makes a number of

recommendations. I'll just list one more: "Do not try to implement

freedom-of-information guidelines within a civil service not trained to

lower its suspicions of outsiders." Very clearly, the kind of mentality

I've seen created in ministries of this government really does not lend

itself to the open, positive, flexible kind of environment necessary to

implement this kind of legislation.

So while I must commend

the minister for this initiative, because it's clearly a step in the

right direction, it's a very modest step. All I can see it achieves for

your government is to make them look bad. If you are the only minister,

and this particular area of your ministry wants to demonstrate that you

care about the public and their right to know and that you care about

their access to information affecting their tax dollars, then by

comparison the other ministers of the Crown look abysmally bad.

had an election in 1986, and the theme of that election from the

government's side was open government. This is the first little ray of

sunshine in terms of open government that I've seen. I know the

minister is a humble person, and he does not wish me to put him on a

pedestal. It's a very small pedestal, Mr. Minister; you haven't done

much. You've opened

[ Page

11063 ]

the door a tiny crack to freedom of information, but the sunshine is not really flooding the chamber or this government yet.

Very

clearly, the attitude of this government has been: we don't want the

public to know what we're doing, because we don't want them to know

what we're doing wrong. You're fighting that by this little initiative.

You're swimming upstream; you're going against the grain, and you're

doing something different than what the other ministers of the Crown

have been doing. But again, it's a very modest step, and the timing is

terrible, because we may well be into an election before even this very

conservative and modest policy initiative will have any chance of

implementation. So I thank the minister for his time and for this

initiative that is clearly in the right direction, albeit very modest.

MS. CULL :

I have a very specific issue I want to raise with the minister which is

of great interest in my own constituency, and it relates to Camosun's

business development centre. Just for the record and to remind the

minister, the funding initially came from the Ministry of Advanced

Education, Training and Technology. Earlier this year, funding for all

the business development centres was cut off without any discussion

with them or any explanation.

In question period with the

minister responsible, the indication was given that perhaps some of

these centres weren't performing quite as well as was desired. But it

appears that they were all cut without any review of the relative

merits of individual centres.

I want to talk specifically

about Camosun's business development centre, because it is a very

successful centre in my community. Last year, with a total budget of

just over $114,000, of which $82,799 came from provincial grants, the

Camosun business development centre was able to assist 39 new

businesses to get started in greater Victoria, creating 90 new fulltime

jobs and injecting $1.5 million into the local economy. This is

successful, I think. I don't think anybody would disagree with the fact

that these figures are significant to our community.

Added

to that is the unprecedented success rate that this business

development centre has had over a three-year period. Over 90 percent of

the businesses that they've assisted to get up and running are still up

and running three years later, and that is unprecedented. I'm sure the

minister has the exact figures, but it seems to me that almost the

reverse is true of small businesses elsewhere in the country in, with

the failure rate.

Your ministry, Mr. Minister, to its credit, has stepped in to assist Camosun,

and I'm very pleased with the actions that have been taken by your staff

to this point to assist Camosun to continue providing this very valuable service

to the community. Initially it looked like your ministry was not even going

to undertake its review until the centre had folded. The funds were going to

run out at the end of May. Some juggling has been done within the college budget,

and they are now able to limp along until the end of July. But the initial response

the college got was that Regional and Economic Development would have a look

at it, but not until the funding was gone.

After

some discussions with some of your staff and sending them a copy of the

business development centre's annual report for last year, they moved

very quickly and have started discussions with the college. Mr.

Minister, we're very close now, I believe, to a mutually satisfactory

resolution with the college, but we're not quite there yet. That's why

I'm rising in the House today to bring up this point with you — not so

much to ask a question as to ask for your assistance in seeing this

through to resolution.

A report done earlier this year by

Camosun College recommended that they consolidate their business

development centre with their incubation centre. The college agrees

with that. They think it would be a wise move, and your ministry staff

also agreed it would be a good move.

Part of the reason

this would be a good move is that it would allow some cost-savings in

administration and overhead. But it is not as much of a cost-saving as

your staff seems to think. This is where I would like your commitment

to some further assistance to resolve this matter.

understand that $60,000 has been offered to the college to continue

the program for another 12-month period, starting July 1. That is down

roughly 25 percent from the grant they received last year. Even with

the cost-savings that can be effected by combining the business

development centre with the incubation centre, they are just not going

to be able to make it. Services are going to have to be reduced. Sixty

thousand dollars will barely cover the contract for the one counsellor

to continue providing full-time services. I think any reasonable person

would agree that, no matter now efficient you are in combining

facilities and locations, there is still going to be some overhead,

some administration cost that will have to be borne by the program.

There

seems to be no dispute as to the value of the service in the community.

Certainly in discussions with your staff they recognize that this

particular business development centre has been doing a good job. The

college is very interested in seeing it keep going. It seems to have a

good measure of success in the community and support from the business

community. But we're falling short here. I would hate to see a

successful program such as this have to close or reduce to half-time,

which I have been advised by the college today is the impact of this

shortage of funding.

So I ask you, Mr. Minister, if you

would commit to looking further into this matter. The funding is going

to run out at the end of the month, so we don't have much time. But I

think that with just a little further assistance and interest from you,

we may be able to come up with something that will serve the community

well, serve the college well and serve your ministry well.

HON. S. HAGEN : Before I answer that, I want to apologize to my staff who are here, because I ne-

[ Page

11064 ]

eglected to introduce them to you. Here with me are my deputy minister, Bob

Plecas, and two assistant deputy ministers, Kathy Mayoh and Chris Nelson, who

have been assisting me this afternoon.

I am very familiar with the issue raised by the member for Oak

Bay–Gordon Head, first of all because I was responsible for it in my

former ministry, and I have been following the negotiations quite

closely. I want to point out that in the Camosun situation, there is a

desire to resolve that. We have had ongoing discussions with the

principal at Camosun, but unfortunately some holidays intervened. The

staff who were on holidays were back yesterday. I am instructing my

deputy minister, Bob Plecas, to involve himself with that issue and

make sure it is resolved — I can safely say — to the

satisfaction of all by the time the funding runs out.

There is no question that the particular program was successful, and I think

it will continue to be. It was very much appreciated by the business community

in the Victoria area.

MRS. BOONE : I would like to get back a bit more onto the loans here.

I guess some of my concerns.... We have gone through the loan structures

and your new processes here, which are going to be oriented to the banks, as

far as I can see, without input or any involvement of the regions. I would like

to go back to a loan made not too long ago to Canfor — a $4.3 million federal-provincial

loan, interest-free for five years. A lot of money there, Mr. Minister. A fairly

poverty-stricken company to give a low-interest loan to.

I think the taxpayers are concerned when they see moneys being given out which

end up as a giveaway of around $2 million from the taxpayers — a gift to Canfor,

a very large and very successful company that in the past.... Perhaps if

it had been in the early 1980s one might even be able to justify it, because

I know a lot of the industries at the time weren't doing so well. But certainly

in the past few years these industries have been doing very well.

[4:30]

How does the minister justify that kind of a giveaway of taxpayers' dollars

through a low-interest or no-interest loan to a major company such as Canfor,

when others are struggling along paying the prime rate or prime-plus in some

cases? How do we justify this, given the fact that Canfor is in competition

with other companies? How do other companies compete? This is certainly one

that we know about, but I am sure there are many others out there as well. Given

the fact that this is now going to be put into the hands of the bankers, how

does the ministry decide — if there are competing interests out there — that

they are going to give assistance to a company and that that company is going

to be given a financial advantage by having a low-or no-interest loan?

Can the minister respond and give me his comments on some of those areas?

HON. S. HAGEN : I would be more than pleased to respond to those questions.

They are basically the same ones that I asked when my staff brought this deal

to me.

What we have here is a perfect example of a provincial government being interested

in diversification and in the use of waste wood products and waste wood-fibre.

Canfor came to us with a proposal to take waste wood-fibre and make a matting

out of it that could be pressed into three-dimensional shapes, and surfaced

with cloth, plastic or other materials to produce interior panels for cars,

furniture components, pallets and packaging material.

The $800,000, five-year, interest-free loan levered a $13 million project that

would not have happened without the provincial government's assistance. Canfor

itself has invested $8.7 million in this project. This is a perfect example

of a project that has taken a brand-new technology, is transferring that technology

and putting it into use building a plant that will take the technology developed

in British Columbia and produce a product that will be sold not only in British

Columbia, not only in Canada, but around the world, thereby generating export

revenues as well as being the first on the market with this product.

As the minister, I was very proud to participate in the announcement of this

deal. If we go back to our original discussion at the very beginning of these

estimates, we talked about the need for diversification, the need for value-added

wood products particularly, and the need to strengthen our fragile economy and

make sure that we can survive the downturns that we know are coming. This is

a perfect example of job creation, of using technology where the company has

invested many dollars just in developing the technology and is now prepared

to invest $8.7 million in a $13 million project generating jobs in New Westminster.

MRS. BOONE : I am sure Canfor is not doing this out of the goodness of

its heart, and I can assure the minister they are probably going to make a substantial

dollar on this. The last I heard, this was a free enterprise party across the

way there that believes that businesses should be free enterprise, that they

shouldn't be given government money and all kinds of things like this.

This is an $800,000 giveaway to a major company. Yes, a no-interest or low-interest

loan is a giveaway to a major company which has financial assets and should

be well able to support itself in this kind of venture. You're saying $800,000.

If they were that interested in it, I don't think they would have backed down

from this kind of development.

I think the general public finds it a little hard to understand and to swallow

why people are given this kind of giveaway. As I said, they are going to be

making a substantial amount of money off this, they aren't going to be giving

it back to the taxpayers, either, and this government is not getting a piece

of the action.

So it's just another aspect of what always makes me laugh when I hear people

talking about this free enterprise party over there — free enterprise as long

as you're putting the dollars into the hands or the

[ Page

11065 ]

pockets of the corporations. It makes no sense to do these things.

HON. MRS. JOHNSTON : Be specific when you make an accusation.

MRS. BOONE : We are specific, Madam Minister; we're talking about Canfor.

would like to know what other major loans have been given out to

companies over — I'll make it easy on you — the past year. What other

major no-interest or low-interest loans in the million dollar area have

been given out to major companies, and what have they been doing with

that money?

We hear that companies are spending a

tremendous amount of money in upgrading their mills to make them

environmentally clean. Are they getting assistance on that? Are there

loans going into those things? Are there loans going into other

diversification areas? What loans have been given out, and where have

the taxpayers' dollars gone in the past year, Mr. Minister?

HON. S. HAGEN :

I find the comments of the member for Prince George North to be very

interesting. I wonder if she is opposed to the science and technology

development fund that was created by this government a couple of years

ago. We have assisted R and D and technology transfer — $10 million in

the first year and $15 million in the second year. I wonder if she is

also opposed to that kind of R and D.

I wonder if she's

aware that forestry companies like MacMillan Bloedel, Canfor and others

are spending millions and millions of dollars annually on research and

development in this province. I think MacMillan Bloedel spends the

most — about $15.7 million this year.

This is not a

government giveaway. This is an interest-free $800,000 loan that has

triggered a $13 million project which will generate many jobs. When the

member states that no money comes back to the government, I wonder if

she's aware of where corporate taxes go. Corporate taxes go to the

federal and provincial governments to pay for the many social programs

we pride ourselves on in this government, so I think her argument is

very weak.

Someone has gone to fetch the list of those projects.

MR. G. JANSSEN : Certainly giving a loan to a company