2003 Legislative Session: 4th Session, 37th 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, MARCH 25, 2003

Afternoon Sitting

Volume 13, Number 4

CONTENTS

Routine

Proceedings

Page

Introductions by Members

Introduction and First Reading of Bills

Coalbed Gas Act (Bill 16)

Hon. R. Neufeld

Securities Amendment Act, 2003 (Bill 24)

Hon. R. Thorpe

Statements (Standing Order 25 b )

Marijuana grow operations legislation

R. Nijjar

Proteomics research facility

S. Brice

Marijuana grow operations

D. Hayer

Oral Questions

Eligibility review for disability benefits

J. MacPhail

Hon. M. Coell

Sale of fast ferries

R. Stewart

Hon. J. Reid

International languages in high school curriculum

P. Wong

Hon. C. Clark

Independent power production proposals

J. Les

Hon. R. Neufeld

Homelessness

J. Nuraney

Hon. G. Abbott

Tabling Documents

Industry Training and Apprenticeship Commission, annual report,

April 1, 2001, to March 31, 2002

Petitions

P. Nettleton

J. MacPhail

Second Reading of Bills

Supply Act (No. 1), 2003 (Bill 26)

Hon. G. Collins

Committee of the Whole House

Coastal Ferry Act (Bill 18)

J. MacPhail

Hon. J. Reid

J. Bray

Royal Assent to Bills

Museum Act (Bill 2)

Motor Vehicle Amendment Act, 2003 (Bill 17)

[ Page 5613 ]

TUESDAY, MARCH 25, 2003

The House

met at 2:04 p.m.

Introductions by Members

Weisbeck: In the gallery visiting from Kelowna on behalf of the Myra Canyon

society are two members: Carl Marcotte and Mr. Ken Campbell. Would the House

please make them welcome.

Belsey: I have the pleasure of introducing the Prince Rupert anchor for CHTK

TV and The Mix, Devon Keller, who's down here joining us for a couple of days.

Would the House please join me in making her welcome.

Visser: Joining us today is the new mayor of Gold River, Dave Lewis, a

consulting forester and one of the great young political minds in this province.

He's going to lead that community on to great and good things in the future.

Would the House please make Mayor Lewis welcome.

[1405]

Brice: In the House today there are 30 children from Glanford Elementary

School along with their teacher, Barbara MacAulay. I would ask the House to make

them welcome.

Sahota: Joining us in the gallery is a constituent of mine, Ms. Noreen

Boudreau, who is the executive director of Janus Family Programs in Vancouver

and the president of the Federation of Child and Family Services of B.C. Would

the House please make her welcome.

Lekstrom: This afternoon, joining us in the gallery are three hard-working

young ladies who do a fabulous job for all of the government caucus. Would the

House please join me in welcoming Caitlin Quinn, Laura O'Connor and Lisa

Johnson, who is also celebrating her birthday today. Happy birthday, Lisa, and

welcome.

P. Bell:

I see in the gallery today we have a very good personal friend of mine and my

campaign manager, a wonderful gentleman from the beautiful community of Prince

George. Would the House please make Mr. Jim Blake very welcome.

Hon. S.

Bond: Not to be outdone by my colleague from Prince George North, I too have

a constituent and friend in the gallery today who works with the Prince George

airport. He's here, as you can imagine, to speak to the Minister of

Transportation. Please join me in welcoming Stieg Hoeg.

Belsey: On behalf of my colleague from the Skeena riding, I would like to

introduce His Worship Jack Talstra, the mayor of Terrace, who's joining us

today.

Introduction and

First Reading of Bills

COALBED GAS ACT

Hon. R.

Neufeld presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Coalbed Gas Act.

Hon. R.

Neufeld: I move that Bill 16 be read a first time now.

Motion

approved.

Hon. R.

Neufeld: I am pleased to introduce Bill 16, the Coalbed Gas Act. The Coalbed

Gas Act removes uncertainty over the ownership of coalbed gas and creates

economic opportunities in British Columbia's heartlands.

The Coalbed

Gas Act is an integral component of this government's heartland economic

strategy and fulfils our throne speech commitment to open up coalbed gas

resources in British Columbia.

Coalbed gas

is an important and untapped source of natural gas that offers tremendous

potential for our province. Energy demand is rising, and new opportunities like

coalbed gas have the potential to diversify British Columbia's energy supply.

British Columbia has been endowed with a wealth of energy and mineral resources.

These resources have the potential to help revitalize our economy and usher in a

new era of prosperity that all British Columbians can enjoy.

In the

past, investment in coalbed gas was hampered by legal uncertainty around

ownership of coalbed gas rights. This act removes that uncertainty and

establishes, in legislation, the longstanding policy that coalbed gas is and

always has been owned by the natural gas owner.

Coalbed gas

potential in the province is estimated to be equal to 90 trillion cubic feet.

This legislation will help unleash the potential of our vast coalbed gas

resources by creating the stability and certainty that industry needs for

investment. The creation of the Coalbed Gas Act sends a clear message that

government is taking action to open up new economic opportunities across the

province and that we are working with industry to make this province a more

competitive and attractive place to invest. The act I'm introducing today

demonstrates our commitment to create a thriving private sector economy that

supports high-paying jobs for British Columbians.

I move that

the bill be placed on the orders of the day for second reading at the next

sitting of the House after today.

[1410]

Bill 16

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

[ Page 5614 ]

SECURITIES AMENDMENT ACT, 2003

Hon. R.

Thorpe presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Securities Amendment Act, 2003.

Hon. R.

Thorpe: I move that Bill 24 be introduced and read a first time now.

Motion

approved.

Hon. R.

Thorpe: I'm pleased to introduce the Securities Amendment Act, 2003. The

primary purpose of this bill is to make amendments to improve the investment

environment in British Columbia. The amendments decrease a number of

requirements, support efficient capital markets and increase investor

protection.

I move that

this bill be placed on the orders of the day for second reading at the next

sitting of the House after today.

Bill 24

introduced, read a first time and ordered to be placed on orders of the day for

second reading at the next sitting of the House after today.

Statements

(Standing Order 25

b) MARIJUANA GROW OPERATIONS

LEGISLATION

Nijjar: It is estimated there are 7,000 to 10,000 marijuana grow operations

in the city of Vancouver and over 20,000 in the lower mainland. I've been

working in my community since the election to deal with this issue. Community

groups and police often feel at a loss. They're very frustrated. Growbusters in

my neighbourhood has six officers working on this issue, but they will never

catch up. When police do arrest criminals, they're reluctant to lay charges

because of the amount of paperwork for what seems to be a lack of appropriate

sentencing. I've heard marijuana grow operators say that the penalties are

merely the cost of doing business.

I've looked

into the possibility of a bill requiring the registration of hydroponic

equipment, at the relationship between B.C. Hydro and our police forces, and

I've looked into encouraging sentences that reflect the public's values.

Repeatedly, police have said they need help with more severe penalties and the

appropriate sentencing from the judicial system, and I agree.

In Ontario

legislation, the Remedies for Organized Crime and Other Unlawful Activities Act

is designed to take the profit out of unlawful activity, disrupt and disable

corrupt organizations and prevent people from being victimized. The legislation

allows the province to (1) ask civil courts to freeze, seize and forfeit assets

that are the proceeds of unlawful activity or that are likely to be used as

instruments in the commission of unlawful activity; (2) take to court two or

more people who conspire to harm the public; and (3) enable direct victims of

unlawful activity to claim compensation against the forfeited proceeds.

Now, there

are those who will say we already have proceeds-of-crime legislation. The

Ontario legislation would strengthen our ability to confiscate the proceeds or

the apparent proceeds of crime. This legislation would give our judicial system

more teeth, with more power not just to compensate victims but to cripple

criminals by attacking what is most important to them — their assets. I

encourage everyone to support this direction.

PROTEOMICS RESEARCH FACILITY

Brice: Recently, along with the Minister of Management Services and the

member for Oak Bay–Gordon Head, I attended an event at the Vancouver Island

Tech Park in Saanich South. We welcomed the relocation of the Genome B.C.

proteomic research project. The move resulted from an agreement between MDS

Metro Laboratory Services, Genome B.C. and the University of Victoria.

This

agreement is a great example of our government's efforts to stimulate new

partnerships between academic, business and biotech communities. Proteomics

research is an exciting new field that extends from genetics research and

focuses on proteins. The ability to unravel and analyze proteins gives valuable

insight into the diagnosis, monitoring and treatment of disease.

The move to

the Vancouver Island Tech Park brings the UVic facility close to MDS Metro Lab

and advances proteomic research in collaboration with the private sector. The

UVic research facility provides protein chemistry services, and MDS Metro

provides a full range of lab services to help treat, diagnose and monitor

patients.

Two groups

will share a pool of skilled and talented researchers and technicians and

sophisticated instruments in over 20,000 square feet of lab space. The move will

also give increased opportunities for students and bring biotech research into

the marketplace.

[1415]

The third

partner, Genome B.C., is a committed investor in the project and in helping to

develop research infrastructure in the province. These new partners are joining

a technology community of other terrific, cutting-edge companies, all happily

working together in the most progressive and environmentally designed building

in the province. The project brings new promise for treatment of disease and

ensures that B.C. is a leader in high-tech development and research.

MARIJUANA GROW OPERATIONS

Hayer: Marijuana grow ops are expanding at an alarming rate in the riding of

Surrey-Tynehead. They have invaded Fleetwood, Fraser Heights, Port Kells,

Tynehead, Cloverdale and many other communities

[ Page 5615 ]

across the lower mainland. Some areas reportedly have more than half a dozen

grow ops in a single block.

These are

family-oriented neighbourhoods. Residents are frightened, and they're

frustrated. They tell me they fear for their children's safety and feel

threatened by the potential for drive-by shootings, home invasions targeting the

wrong homes, and fires. Residents are also frustrated by the light penalties

handed down to the grow operators. They tell me there seems to be an apparent

lack of seriousness in our courts to the risk these grow ops represent to our

neighbourhoods. Time and time again, the police arrest these operators only to

see them right back on the street and back in the business in someone else's

neighbourhood.

Grow ops

are organized crime. They are invading my riding of Surrey-Tynehead and many

other communities that were once considered safe places to raise our children

in. We must clamp down hard on marijuana grow ops, and we must ensure that our

courts take a hard line and punish these criminals appropriately.

We need to

make our voices heard in Ottawa and encourage the federal government to change

the Criminal Code. The communities must also come together with local government

representatives, the RCMP and B.C. Hydro to share information and explore ways

to stamp out grow ops.

I look

forward to participating in the Premier's dialogue on crime to share my

constituents' concerns about grow ops, identify ways to act to take our

neighbourhoods back from these criminals and restore justice to our judicial

system.

Oral Questions

ELIGIBILITY REVIEW FOR

DISABILITY BENEFITS

MacPhail: Yesterday the opposition revealed that the Minister of Human

Resources had made an error in informing people with disabilities about the

appeal period. Today we learn that because of our raising the issue, he has

corrected his error and the appeal process will now conform with his own

regulations. Let's see whether we can make some progress today on some other

fronts.

The

Minister of Human Resources said yesterday that the disability review process

was not about cost-cutting. Then in the next breath he said that the previous

system was growing at a rate that was not sustainable. To the minister: which is

it? Is it about cost-cutting, or isn't it? His own documents say that the plan

is to kick 9,100 people off disability benefits. It's a straightforward

question. It's not a hard question. What is it? Is it about cost-cutting? Is it

about kicking people off benefits or not?

Hon. M.

Coell: The government wants to provide income assistance to those people who

are most in need. We've done a review of the previous DB-2 clientele, and we

want to make sure we're targeting our funds to those most in need.

I think

you'll find that over the coming years, the caseload continues to rise. I've

said this before. The caseload for people with disabilities will continue to

rise, but it will rise at a slower rate than it had been in the past. In the

past it had been rising at about 11 percent per year since the changes were

made. The average in Canada was about 2 to 3 percent, and we'd like to see it

rise at those levels.

I hope that

helps the member.

Mr.

Speaker: The Leader of the Opposition has a supplementary question.

MacPhail: Well, in fact, it isn't about percentages. It's about people in

need, as the minister says, and people with disabilities getting what is due to

them in terms of government support. Again, if this province doesn't want to be

reasonable in that area, then I guess we fall to tenth place in that area as

well.

Yesterday

the Minister of Human Resources accused advocates for disabled British

Columbians of fearmongering. He said that they've chosen to misinform….

Interjections.

Mr.

Speaker: Order, please.

MacPhail: The minister said that they have chosen to misinform and spread

fear among the very people they have been advocating for. The issues that have

been raised in this House are from the advocates of people with disabilities.

[1420]

The

minister should be ashamed of himself, as should his government. From day one

it's been his own incompetent handling, as we showed yesterday, of this review.

It's caused fear, anxiety and enormous suffering for thousands of British

Columbians.

Can the

minister tell this House what advocates for the disabled are supposed to do when

they have people with disabilities coming to them, who he's kicked off benefits,

and are now panicked by the complicated and bureaucratic appeal process? What

are they supposed to do?

Hon. M.

Coell: I think I said "the member and her friends," and she can

take that for what it's worth.

The

government wants to make sure that people who need assistance get assistance in

British Columbia. We're spending approximately $450 million on continuous

assistance for people in need, and we're pleased to do that. We're pleased to

make sure that people who have needs have those needs met in British Columbia.

But we also have a responsibility to make sure that the people receiving the

funds from government are reviewed periodically, and a review every five years

is something that we put in legislation and that we intend to do. In the

previous government there

[ Page 5616 ]

was no review, no medical review of any files. What we want to do is make

sure that funds collected by the taxpayer are going to those who are most in

need.

Mr.

Speaker: The Leader of the Opposition has a further question.

MacPhail: Yes. The opposition is raising concerns of every single person

with a disability in this province who can't get representation from their own

MLAs, and that's who this minister is accusing of fearmongering.

Interjections.

Mr.

Speaker: Order, please.

MacPhail: Not once has one of them stood up to defend people with

disabilities.

Interjections.

Mr.

Speaker: Order. Let us hear the question, please.

MacPhail: Disabled British Columbians have reason to be frightened. In the

few days that the minister is allowing for appeal — even now, according to his

own rules — disabled British Columbians, some of whom have trouble reading and

writing, are supposed to navigate their way through a maze of bureaucratic hoops

and provide extensive documentation countering the ministry's case. It can take

days to get an appointment with the social worker to get back the 23-page form

to begin the appeal process. It takes days, sometimes weeks, to get an

appointment with the doctor to provide an opinion on the appeal. It can take

weeks to get an appointment, especially in rural areas, to get a legal advocate

to help prepare a case. Many will just give up. Will the minister at the very

least show some humanity, admit that his appeal process is a bureaucratic maze

with no reasonable time lines and extend the appeal time lines for disabled

British Columbians who he has kicked off benefits?

Hon. M.

Coell: I think it's important for the member to know that over 7,500 new

applications have been received since September. That's 7,500 people who believe

that the new criteria fit their needs, have taken the time to pick up an

application, have gone to see a doctor and a health care professional…

Interjections.

Mr.

Speaker: Order, please. Order.

Hon. M.

Coell: …and have put their applications in. I think it's important, too,

to know that 3,200 more people are receiving disability assistance than when the

previous government was in. We've increased from $200 to $400 the amount that

people can earn on disability assistance. We are spending $24 million…

Interjections.

Mr.

Speaker: Order. Let us hear the answer, please.

Hon. M.

Coell: …on employment programs for people with disabilities.

SALE OF FAST FERRIES

Stewart: Three years ago the Premier of the day admitted that building them

was a mistake, and yesterday we found out how much they are worth. Yesterday

British Columbians were shocked when the NDP's legacy, the three fast cat

ferries, sold for a combined total of just $20 million, less than 5 percent of

what they cost to build. Some British Columbians are asking today whether

government was thorough enough in its attempt to mitigate the loss caused by the

NDP's fiasco.

To the

Minister of Transportation: could these fast ferries have been sold sooner and

for more money?

Interjections.

[1425]

Mr.

Speaker: Order, please. Order.

Interjections.

Mr.

Speaker: Hon. members, let's have some order so we may hear the answer from

the Minister of Transportation.

Hon. J.

Reid: Over the last 20 months we have been very diligent in our examination

of the three ferries. We looked at all possible uses.

Interjections.

Mr.

Speaker: Order.

Interjections.

Mr.

Speaker: Order, please. Order. If you wish to make comments, please address

the Chair. The Minister of Transportation has the floor.

Hon. J.

Reid: We looked at the route the ferries were built for and why they were

losing as much money as they were, operating on that route — that they carried

the wrong mix of traffic for the route. We looked at using them on different

routes. We looked at replacing the engines with conventional engines, which

would have cost about $30 million a vessel in addition. We looked at the lack of

loading and unloading facilities, to use them on different routes. We examined

everything that people brought forward to this office.

[ Page 5617 ]

It became

apparent that there wasn't another use we could put them to that wouldn't

require a huge investment and ongoing loss of taxpayer dollars. We realized, as

independent reports indicated, that a sale was the best route to go with these

ferries, and we pursued a sale of the ferries. The previous government had had

an offer of $88 million on the ferries. They decided not to pursue that because

of the timing of the election.

Interjections.

Mr.

Speaker: Order, please. Order.

Please

continue.

Hon. J.

Reid: After the election we pursued that option, that opportunity. Changes

occurred in the world marketplace. That option and opportunity was no longer

there. For the last two years we looked at every other opportunity, and

yesterday the true value of those ferries was realized. It's a very sad end to

an experiment of the previous government.

Interjection.

Mr.

Speaker: Order, please. Question period will continue when the Leader of the

Opposition comes to order.

INTERNATIONAL LANGUAGES IN

HIGH SCHOOL CURRICULUM

P. Wong:

My question is to the Minister of Education. Proposed changes to high school

graduation requirements would reduce the number of international language

courses offering provincial exams. My constituents are concerned that these

changes could reduce the emphasis that international languages currently have in

the high school curriculum. To the Minister of Education: why are these changes

being proposed, and what impact would they have on high school language

training?

Hon. C.

Clark: How come I don't get any questions about the fast ferries?

Interjections.

Mr.

Speaker: Order, please. Order, please. Let us hear the answer.

Hon. C.

Clark: In answer to the member's question, one of the ideas that surfaced

during the course of our review of grad requirements in British Columbia was the

suggestion that perhaps we would cut back on the number of exams. Since we've

been on our consultation about that, I've heard quite a bit of concern,

particularly from members in the Chinese community and the Punjabi-speaking

community. I have heard lots of representations from this member and from the

member for Burnaby North in particular. Their concerns are that it will

undermine the value, or at least the public perception of the value, of having a

second language and that it might damage children's chances of applying to

university, because they need those courses. I take those representations very

seriously. We've wrapped up our consultations, and we'll be coming forward with

a decision very, very soon.

[1430]

INDEPENDENT POWER PRODUCTION

PROPOSALS

J. Les:

My question today is for the Minister of Energy and Mines. Last fall the

minister tabled a new energy plan for the future in British Columbia. A key

provision of that plan was the ability of the independent power producers to

competitively supply new electrical supply for the future of our province. B.C.

Hydro has since requested proposals for new electrical generation, but certain

self-interested groups, mostly associated with the previous failed and

discredited government, have maintained that B.C. Hydro's new direction is

determined to fail.

What I

would like to hear today from the minister is this….

Interjections.

Mr.

Speaker: Order, please. Order, please.

Please

continue.

J. Les:

I would love to hear from the minister what the response has been to those

proposal calls both from the IPP community and from the financial community in

British Columbia.

Hon. R.

Neufeld: There has been great response to the calls that B.C. Hydro made in

May for customer-based energy in the province. They called for about 800

gigawatt-hours. They received proposals for 6,800 gigawatt-hours. In the fall,

in October, they called for clean energy, another 800 gigawatts of power, and

received about eight times what they wanted in proposals.

The IPP

community has stepped up to the plate. They say they're willing and ready to be

able to do it for the province. In fact, VanCity Credit Union in Vancouver has

proposals on its desk and has approved financing for one of the projects in

British Columbia. It's more good news for the province.

HOMELESSNESS

Nuraney: My question is to the Minister of Community, Aboriginal and Women's

Services. While in Vancouver earlier this month the Prime Minister of Canada

announced a $400 million initiative for homelessness across the country. We in

Vancouver and in the lower mainland have a dire need to tackle this problem. I

think, in my opinion, it is a real blemish on our society.

Can the

minister…?

[ Page 5618 ]

Interjection.

Mr.

Speaker: Order, please.

Interjections.

Mr.

Speaker: Order, please. Order. Let us hear the question.

Nuraney: This reminds me of my old car. After I switch it off, it still

continues to putter.

Can the

minister…

Interjections.

Mr.

Speaker: Order, please.

Nuraney: …tell us how we are going to benefit from this? When can we

expect the implementation of this initiative?

Hon. G.

Abbott: Thank you….

Interjections.

Mr.

Speaker: We'll wait for order, to hear the answer.

Interjections.

Hon. G.

Abbott: Whenever you're done.

MacPhail: I won't be done for quite awhile — until you stop making people

homeless….

Interjections.

Hon. G.

Abbott: The issue of homelessness does remain a very important provincial

and national issue; there is no question about that. As the member noted, the

Prime Minister and the federal minister responsible — Claudette Bradshaw, the

Minister of Labour — when they were in British Columbia recently, did announce

an extension of the SCPI program of about $400 million, as the member noted,

nationally. We are still awaiting some detail from the federal government with

respect to that, but we do expect that British Columbia will receive somewhere

between $16 million and $17 million annually for three years as part of the

renewed SCPI program.

[1435]

We are

certainly looking forward to working with Minister Bradshaw, with whom both the

Minister of Human Resources and I have an excellent relationship. We're looking

forward to working with her. We have partnered in the past through the Ministry

of Human Resources and through Community, Aboriginal and Women's Services —

B.C. Housing — to partner with projects with the federal government and with

local governments to address the issue of homelessness.

certainly are looking forward, in the weeks and months ahead, to seeing other

projects roll out. Certainly, we were delighted to have the sale of the

Woodwards Building at a discounted rate to the city of Vancouver. That's

important. Certainly, we're looking forward to announcing other projects in

conjunction with the city, other local governments and non-profits to address

the very serious problem of homelessness that we have in this province and in

this country.

[End

of question period.]

Tabling Documents

Hon. S.

Bond: I am presenting today the annual report of the Industry Training and

Apprenticeship Commission for the period April 1, 2001, to March 31, 2002.

Petitions

Nettleton: I wish to submit a petition signed by 677 citizens of British

Columbia intent on stopping the further privatization of B.C. Hydro.

MacPhail: I rise to present a petition from Cedar Cottage Neighbourhood

House concerning cuts to child care. Cedar Cottage Neighbourhood House is

committed to providing quality accessible child care at affordable rates. Cedar

Cottage….

Mr.

Speaker: Thank you, hon. member. Thank you.

MacPhail: There are rules for one side of the House and not the other, eh?

This petition…

Mr.

Speaker: Thank you, hon. member. Please present your petition.

MacPhail: …is to decry the cuts in child care.

Mr.

Speaker: No more remarks are in order. Thank you very much.

MacPhail: I guess we have different rules for everybody, then.

Mr.

Speaker: The Chair resents that last remark, and I would ask the member to

withdraw it, please.

MacPhail: I withdraw it, Mr. Speaker.

Orders of the Day

Hon. G.

Collins: I call second reading of Bill 26.

Second Reading of Bills

SUPPLY ACT (No. 1), 2003

Hon. G.

Collins: This supply bill is in the general form of previous supply bills.

The first

section of the bill represents 1/6 of the voted expenses as presented

[ Page 5619 ]

in the Estimates to provide for the general programs of government.

Fifty percent of financing transaction requirements set out in schedules C, D

and E of the Estimates have been provided for in the interim supply bill.

This will allow time later for more complete debate on those items.

The third

section requests the disbursements related to revenue collected for and

transferred to other entities which appear in

schedule F of the Estimates .

As there's no impact on the deficit borrowing or debt from these particular

financing transactions, 100 percent of the year's requirements is being sought

in this supply bill.

I move

second reading of Bill 26.

Motion

approved.

[1440]

Hon. G.

Collins: I move that Bill 26 be referred to a Committee of the Whole House

for consideration at the next sitting of the House after today.

Bill 26,

Supply Act (No. 1), 2003, read a second time and referred to a Committee of the

Whole House for consideration at the next sitting of the House after today.

Hon. G.

Collins: I now call committee stage debate of Bill 18.

Committee of the Whole House

COASTAL FERRY ACT

The House

in Committee of the Whole (Section

B) on Bill 18; J. Weisbeck in the chair.

The

committee met at 2:45 p.m.

section 1.

MacPhail: I want to talk first about the definition of "core ferry

services." There's a definition for core ferry services later on in the

legislation. I assume core ferry services…. By definition, it says it's about

transportation services that ferry operators are required to provide under

contract. The minister separates out, when she talks about it, core routes and

core services and says both will be protected under the new legislation.

Does the

definition of core ferry services include core routes? How does the minister

distinguish between core routes and core services?

Hon. J.

Reid: There are two

definitions. One is "core ferry services,"

which does indeed refer to services. The next definition is "designated

ferry routes," which would be the core ferry routes.

MacPhail: Is it the minister's view that the only services the ferries

operate are the transportation routes, that there are no other services provided

that are core services?

Hon. J.

Reid: I was wondering if the member could clarify the question. I'm not sure

if she's talking about ancillary services — in addition to — or if she's

talking about the routes and whether additional routes are possible. If she

could clarify the question, that would help with the answer.

MacPhail: I'm sure everybody thinks of the Ferry Services as just the

service of moving a ferry from point A to point B. My understanding is that

there are other services that the ferry corporation provides, ancillary services

in terms of contributions to communities and also rescue services —

requirements under the law to provide services to communities that are

ferry-dependent — or services related to medical evacuation, those kinds of

things.

Hon. J.

Reid: All those services would be covered in the contract between the

corporation and the government.

MacPhail: How do they get guaranteed? Is it that we have to read the

contract in order to understand that those get guaranteed? My understanding is

that the contract won't be made public until…. Will it ever be made public?

Hon. J.

Reid: This contract will be made public after it's signed. The contract is

for 60 years. The services the member was referring to — medical emergency,

evacuation — would be part of the 60-year contract.

[1450]

J. Bray:

Just a couple of quick questions on

definitions. With respect to designated

ferry routes, I'm wondering if the minister could just advise us whether or not

it limits the ability for additional opportunities for entrepreneurs and other

people to provide ferry services on the coast and to designate new routes or to

determine other opportunities with respect to ferry routes under this

definition.

Hon. J.

Reid: We certainly would like to see additional routes that could be

offered, that could be operated, so this certainly doesn't restrict the offering

of additional routes. In fact, as we get further into the legislation…. One of

the roles of the commissioner is to foster competition, so we believe that

principle is built into this legislation.

J. Bray:

The other question I have under

section 1, then, is under the definition of

"ferry operator." Is it then, with respect to this legislation, that

there may be other individuals down the road who may be involved in ferry

operations outside of the coastal ferry services contract provider — that this

doesn't limit the ability of other individuals to become involved in the

provision

[ Page 5620 ]

of ferry services either under that contract or independent of that contract?

Hon. J.

Reid: Certainly, to encourage ongoing competition with regard to delivery of

transportation services, subcontractors can be used, just as they are now, to

deliver those core services. That's certainly an option. This doesn't limit in

any way the ability for other ferry operators to enter into a business plan and

fulfil that business plan. We know right now in Nanaimo there's a foot passenger

ferry underway that's totally separate from what government does, totally

separate from what exists in this legislation. In no way does this legislation

impact people who want to offer ferry service in the future.

MacPhail: Well, further to the questions just asked by the member for

Victoria–Beacon Hill, what is the business plan where the minister has made

predictions, forecasts, for fare increases? What does the business plan entail

in terms of competition that will still say that ferry increases are limited to

the amount that she has announced?

Hon. J.

Reid: I would suggest, if the member doesn't mind too much, reserving that

for when we discuss

section 39, because that's when we're going to be talking

about the price cap and the fare increases. There's a much larger topic there,

so if that works well, then I think it would be better in the larger context of

that discussion.

[1455]

MacPhail: Yes, that's fine. I'll do that. Thank you.

Just to be

clear, then, the company that purchased the three fast cat ferries yesterday can

operate all three vessels within the waters now served by B.C. Ferries.

Hon. J.

Reid: The waters that B.C. Ferries operates in are certainly not B.C.

Ferries' waters, and so anyone can operate in those waters. What we're looking

at here is the situation around terminals and the property and the access to

those terminals, again making sure that people on the coast know that their core

services are protected, are ongoing, and that rates are going to be predictable

and certain for them. It doesn't preclude, again, any entrepreneur from looking

at new opportunities within the waters of British Columbia.

MacPhail: What I actually meant was: was there any part of the bid yesterday

that required the vessels to be used outside the waters now used by B.C.

Ferries?

Hon. J.

Reid: No.

Section 1

approved.

On

section

MacPhail: Mr. Chair, I want to thank the Ferry Corporation for a briefing on

this legislation, but as a result of the briefing I need some guidance as well,

just in terms of what sections to discuss it under. As part of the legislation,

the Ferry Corporation is set up as an entity under

section 2 but then is

converted to an entity under the Company Act. Could the minister just quickly

point me to that section? Oh no, I'm sorry. It's not in the legislation about

converting to the operation under the Company Act. Or if it is, point me to the

section, please.

Hon. J.

Reid: It's division 2,

section

Section 2

approved.

On

section

MacPhail: This is a

section that establishes the capital — the ability for

the corporation to raise its capital exclusively, as I understand it. Could the

minister explain the intent of this section, please?

Hon. J.

Reid: This

section is simply a technical provision to allow for the ability

of the authority to have money to cover the voting share.

Section 3

approved.

On

section

MacPhail: This

section makes the first directors of the authority the same

as the existing directors of the B.C. Ferry Corporation, and of course, the

existing directors of the B.C. Ferry Corporation are OIC appointees, government

appointees, cabinet appointees. How long will this board be in place?

Hon. J.

Reid: One year.

[1500]

MacPhail: There was great fanfare about this government. In fact, this has

been the government of the day's position when they started announcing the

changes they were going to make to the B.C. Ferry Corporation — that it was

going to be an independent authority and that it was going to be free of

political meddling. Well, this board will be in place until the last year of

this government's mandate, so how would the public notice the change?

Hon. J.

Reid: This board would be in place until April 1, 2004. What's important

here is that the board that's been in place has been there going through the

core review of B.C. Ferries. It has been instrumental in understanding this

direction in choosing a new CEO for British Columbia Ferry Services and

certainly is integral to the orderly transition to a new system. That's the

purpose of the year.

MacPhail: Yes, but my understanding is that the new corporation is in place

days from now — April 1. The new corporation will be in place. All the work of

[ Page 5621 ]

changing it over has been done. We're passing legislation. It doesn't seem

that anybody else maybe has any difficulty with this. What's the need of exactly

the same politically appointed board for a brand-new structure that's

independent?

Hon. J.

Reid: While the new entity will be in place April 1, there's still a

considerable amount of work to be done to complete that transition. I think it

should be fairly obvious that this is quite a significant undertaking. For

example, in looking at the board of the new authority, while there is

representation from regional districts, there is still work to be done in

working out that process with community consultation to get to how those board

members will be brought forward. We do expect that this board will be able to be

in the best place to achieve the work that needs to be done, and I certainly

believe they're going to be very busy over this next year in order to achieve

that.

MacPhail: How much are the directors being paid under this year?

Hon. J.

Reid: They will be getting paid the same as they are currently getting paid,

but to be absolutely clear for the record, if I could bring that answer back

very shortly…. I don't want to misquote a figure, and we don't have the exact

figure. We will get the answer, and I shall bring it back into the debate in

just a few minutes. It will be the same as they're currently getting, and we'll

establish that exact amount in a few moments.

MacPhail: I'd appreciate the chair's compensation as part of that as well,

please. I guess that will be an annual figure for the next year, the next 12

months.

[1505]

Was an

interim board with new members considered as an alternative at all to continuing

the board of directors of the B.C. Ferry Corporation? I note that the government

likes to talk about this model being the same as or similar to or modelled after

the Vancouver Airport Authority. It started with brand-new directors. Now, there

was no airport authority in place before, but there were still exactly the same

transition issues. I'm just curious as to whether this government even

considered a brand-new board.

Hon. J.

Reid: In fact, as we looked at the airport authority model, we learned some

things from the airport. We certainly had discussions with them, as well, as to

what worked and what didn't work. One of the strong messages was how important

continuity was. Once again, there is a tremendous amount of work that the board

has been involved in, in developing this model and in being able to execute it

and turn it over to others. While we did consider the different models and the

different options available, we believed the advice we were receiving about

continuity and the importance of transition. The amount of knowledge the people

on the board have amassed in working extremely hard through a very complex

process, we feel, is very valuable to carry on through this next year.

MacPhail: The term of the office of the first directors of the authority

expires March 31, 2004, so I assume they won't be eligible for the board of

April 1, 2004.

Hon. J.

Reid: There is nothing with regard to the appointment of the current

directors. There's nothing to exclude them, but there's certainly nothing to

include them. There's no provision made for those people to carry on into a

future board.

To answer

the previous question with regard to the current levels of remuneration for the

B.C. Ferries board members, the chair receives an annual honorarium of $30,000,

the board members receive $15,000 annually, plus there's $750 per day to attend

meetings.

MacPhail: I'm not sure whether the corporation is on a fiscal that ends in

March or a fiscal that ends in December. Perhaps we could actually have the real

compensation for the directors — what they actually got.

Hon. J.

Reid: Just for clarification, are you asking for how many meetings they

attended so, therefore, how much money was allotted to them? I obviously don't

have that information with me at the moment. Maybe the member can clarify. In

looking forward to the next year, is that the context of the question?

MacPhail: Is the minister going to get that information for me? Sorry, I

just missed it — whether she was or not.

Hon. J.

Reid: It will take some time to pull that information together. If I don't

have it during this discussion, we'll submit it to the member's office and

provide her with that information.

MacPhail: That's fine, because we still have estimates to go through. We can

discuss these matters around estimates, but I do need it before that. I am

interested to understand, then, why the stutter step of saying that we've got

the interim board when it's very possible that the interim board could become

the new board of the independent authority. It is possible. I just asked the

minister whether they were precluded, and she said no, they're not precluded.

There's nothing to prevent this government from making the interim board the

permanent board, as I understand it.

[1510]

Hon. J.

Reid: The regional districts will have involvement in choosing members to

represent coastal communities so that there is, again, this process that is to

be developed with consultation with those communities to make sure there is that

representation. How the current board could end up in that position…. I can't

figure how that could happen.

[ Page 5622 ]

MacPhail: No, that's a good point. The board members that are, then,

separate and apart from that…. In fact, I understand that…. Well, we'll get

to that in

section 5, I guess — about the board members other than the coastal

community appointees.

Section 4

approved.

On

section

The

Chair: Minister, we have an amendment on

section 5. Do you want to pass that

amendment and finish?

Hon. J.

Reid: Yes, Mr. Chair. I move the amendment to

section 5 that's in the

possession of the Clerk.

[SECTION

5, in the proposed

section 5 (4) by deleting "and 6 (2)," and

substituting "and 6 (3),".]

On the

amendment.

MacPhail: Could the minister explain the amendment, please?

Hon. J.

Reid: It's a typographic error. In the proposed

section 5(4) we're proposing

to delete "and 6 (2)" and substitute "and 6 (3)."

Amendment

approved.

section

5 as amended.

MacPhail:

Section 5 talks about the directors that will be in place as of

April 1, 2004, and 5(1) says: "Directors of the Authority, other than its

first directors who are in their first term of office with the Authority, must

be qualified individuals and must be appointed in accordance with this

Division."

I need two

separate explanations. What does the phrase "other than its first directors

who are in their first term of office with the authority" mean?

Hon. J.

Reid: It's just simply to say the current directors as such for the first

year, and thereafter, the directors will have to be the qualified directors.

MacPhail: So the phrase "other than its first directors who are in

their first term of office" refers back to clause 4 and no one else?

Hon. J.

Reid: Yes.

MacPhail: Could the minister then define…? The

Lieutenant-Governor-in-Council is going to determine qualification for the

directors after April 1, 2004, as I understand it. That's 5(2). How is the

government, the cabinet, going to determine qualification?

Hon. J.

Reid: That

section refers to the 13 regional districts being broken down

into four appointment areas. It has nothing to do with who will get appointed

from those areas.

MacPhail: Sorry — 5(1) means the qualification is that they come from the

right geographic area? I'm looking at 5(1). It says: "…must be qualified

individuals and must be appointed in accordance with this Division." I

assume "must be appointed in accordance with this Division" means

coming from the different districts, but I'm asking what "must be qualified

individuals" means.

Hon. J.

Reid: I'd like to refer the member to the

definitions section. In the

definitions

section is the definition of qualified individuals.

[1515]

MacPhail: Okay. So those are the only limitations. I assume, then, that….

Well, let me ask this. Are those the only limitations on qualification?

Hon. J.

Reid: In addition, under

section 9, the member would note that there are

sections of the Company Act that would apply to the authority and its directors,

and that would be in the Company Act. People who are excluded would be

bankrupts, people under the age of 18, etc.

MacPhail: Well, that's good to know. My questions around qualification

relate to my previous line of questioning about what prevents the board from

just rolling over then. I note further on here in the same section,

section

5(3), it says that nine individuals have to be appointed by various geographic

groupings of coastal communities, but the qualifications also say that it can't

be the elected people from those various geographic areas. So clearly the

geographic clusters are going to have to appoint someone, other than the elected

officials, from themselves. Why couldn't they just appoint someone or be asked

to appoint someone that's currently on the board? There's no residential

requirement. I don't note that there's any requirement that you live in a

particular community or anything.

Hon. J.

Reid: This process in involving the coastal communities. We trust that the

coastal communities will know how to best send forth their representatives, so

we're putting as few restrictions as possible in order to get a good-quality

board. While the member is speculating that in theory, some very bizarre

circumstance could happen, the likelihood of that happening is, again, hard to

estimate. What's important here is that the coastal communities in the different

groupings will put forward their nominees, and I trust those coastal communities

will put forward people that they believe will represent them.

MacPhail: I'm not speculating. I'm just asking for information about how it

won't be a possibility. I can only imagine that if a coastal community wishes to

keep a particular service going or whatever, there may be various alliances or

allegiances developed. That's all. I'm just trying to see how independent this

new authority actually is. There is a way of defining true independence, and

this legislation doesn't do that.

[ Page 5623 ]

[1520]

Let's go to

5(3), then. It talks about the appointees, the nine individuals who will be

appointed. The first group of the nine…. Oh, I'm sorry. Does the board of

directors that consists of nine individuals…? Let me just see here. That

doesn't include the CEO, as I understand it, of the new authority

Hon. J.

Reid: The CEO could be, but if so, it would come out of one of the two

at-large members.

MacPhail: Okay, so let's go through 3(a). Four of the nine are to be

appointed from the nominees provided under 6(1)(a), and 6(1)(a), as I understand

it, defines an appointment area. This is the work that the minister will be

doing over the course of the next year. How will that work be done to determine

appointment areas, and with whom will she be consulting?

Hon. J.

Reid: The process will be that the board of the authority will do the

consultation with the communities and will bring forward their recommendation.

MacPhail: Why are there four appointment areas? I assume area literally

means area, a geographic area. Does it?

Hon. J.

Reid: I'm going to read into the record the regional districts and the areas

that we've defined. We have the northern and central coast area, and in that

would be the Skeena–Queen Charlotte regional district, Kitimat-Stikine

regional district and the Central Coast regional district. There is the northern

central Vancouver Island area: Mount Waddington regional district,

Comox-Strathcona regional district and Nanaimo regional district. There's the

southern mainland area: Powell River regional district, Sunshine Coast regional

district, Squamish-Lillooet regional district and greater Vancouver regional

district. Then there's southern Vancouver Island area: Alberni-Clayoquot

regional district, Cowichan Valley regional district and the capital regional

district. That is what we have defined and how we have grouped them.

MacPhail: So the government has taken current regional districts and

clustered them into four groupings. Was the UBCM consulted on this?

Hon. J.

Reid: There has been some dialogue with UBCM , but I wouldn't say that

there's been specific dialogue on this specific appointment process.

MacPhail: What happens if the community consultation suggests a model

different than that? I've been trying to find out, with my limited resources

available, where this model came from. I'm not in any way suggesting that it

isn't going to work — I have no idea whether it's going to work — but it's

not embedded in anything that has a history to it, and it certainly hasn't come

from the Coastal Council, for instance.

[1525]

The

minister has just acknowledged that it hasn't come from the UBCM, so what if it

doesn't work? What if the groupings aren't appropriate? I have some experience,

and some of the staff of the minister there have experience as well, in setting

up something called the GVTA , the Greater Vancouver Transportation Authority,

and there were certainly huge amounts of toing and froing amongst areas to be

established for appointment. What if this doesn't work? Is there an opportunity

for change?

Hon. J.

Reid: There is flexibility because this will be determined by regulation, so

there is flexibility in how these appointment areas work. But it is the coastal

communities we heard from that said they do want to be part of the authority.

They do want representation. It is in response, indeed, to representation from

coastal communities that this is part of the act.

MacPhail: Yes, I'm just focusing on the four cluster areas and understanding

geographic pride and sometimes competition. I'm trying to focus on what

opportunities there are for input into that.

I note that

the…. Oh well, I'll get to that in a moment. I want to talk about the two

consecutive terms and term limits. The next one is to be appointed.

Section

5(3)(b): the trade union representing the employees of the British Columbia

Ferry Corporation will get one appointment. Does the Ferry Corporation have only

one trade union?

Hon. J.

Reid: Yes.

MacPhail: And one local?

Hon. J.

Reid: Several locals but one union.

MacPhail: What consultation was done with the union about this particular

clause?

Hon. J.

Reid: We have one representative on the board of B.C. Ferries now

representing the union, and we indicated to them early on that they were

important to the process moving forward and so made a commitment, again, to make

sure they were included.

MacPhail: Yeah, but sorry. I know that appointee very well, but he's not

from the union. He was way, way, way back, but his most recent life of the last

20 years was different. I'm just wondering if it was up to that appointee, then,

to consult with the union about this.

Hon. J.

Reid: With regard to this, it is the union who gets to decide, in the

future, who to nominate. As long as they go by the qualifications that have been

included in the definition, it is the union that does get to decide who their

nominees will be.

MacPhail: My question was about whether they were consulted on getting an

appointment to the board

[ Page 5624 ]

at all and the limitations to the qualifications. The union gets to have an

appointment — and I haven't heard that the union objects to this at all —

but the definition of "qualified individual" says it can't be a member

of the union under any circumstances. Then there are further limitations on

preventing conflicts of interest.

[1530]

I'm just

wondering whether the union was consulted, because there are other boards that

allow union representation and allow that there be exclusion from board of

director meetings when personnel matters are conducted.

Hon. J.

Reid: The decision was made that there would be representation from labour

management. There wasn't a broad consultation process with any of these

designations, because what we have done is list the qualifications and then

allow those groups to put forward their nominees. We believe, again, that we are

reacting to a genuine desire for parts of the province to be represented in

this. As the member has said, we haven't heard negatively from the union that

they have a concern about this.

MacPhail: The director that will be appointed under this

section will

ultimately be chosen by the government from a list of nominees put forward by

the union. The union has to put forward a list of at least three and not more

than five nominees. Then the government chooses amongst that. Is that how I read

the legislation?

Hon. J.

Reid: I think I need to clarify a very important point here. It is not

government that will pick the members of the authority as we move forward; it is

the members of the authority in working through the processes. It is not

government that picks those future members of the authority.

MacPhail: Okay. Well, then let's go through this. Is it kind of like a

pyramid thing or a reverse pyramid? Who do you start with to start the process,

then? There is a selection process required for the appointee from the trade

union. They have to submit three to five nominees. Who is it that selects that?

Does that nominee get to participate in the selection?

Hon. J.

Reid: It's standard practice in boards to have a subcommittee of the board

as a selection committee, which then works with the people who have been put

forward as nominees, looks at the criteria and selects the future members of the

board of the authority.

MacPhail: Yes, I'm talking about the board that will be brand-new starting

April 1, 2004. How do you get it going? Just walk me through how it works. I'll

ask my question then, so you can also answer this.

Section 5(3)(

d) says: "2

are to be appointed from qualified individuals." I need clarification on

that. Just walk me through. How is this new board going to be produced come

April 1, 2004?

[1535]

Hon. J.

Reid: The current board of the authority would select, within their members,

a subcommittee. That subcommittee will work with what has already been

determined through the process over this next year of the divisions with the

regional districts.

That

subcommittee will call for nominees to come forward. The names will come forward

to the subcommittee. That subcommittee then will have a skills profile to work

with. Their objective is to get a well-balanced board, so they will work through

that as, again, is current practice in boards.

They will

then make those selections, with two exceptions. There are two members of the

board that the provincial government gets to appoint. Other than that, they will

work through the nominees, the skills profile, a well-balanced board. Then there

are the two members at large that the board also gets to appoint; it doesn't

require nominees in order to do that.

MacPhail: It will be the interim board that will be making the appointments.

I guess you've got start somewhere. It still does mean that the OIC appointments

of this government will be making the determination of the independent board.

Having said

that, is the government then, come April…? The determination for the board

that will take office April 1, 2004, will be a completely hands-off process of

the government, except for those two L-G-in-C appointments.

Hon. J.

Reid: Yes, that's correct. Just to remind the member, while the current

board makes the appointments, they have to make them from the nominees that

other people have provided.

MacPhail: So the board won't be working with the Premier's appointments

office.

Hon. J.

Reid: No.

MacPhail:

Section 5(4) says that the length of a term is three years and

that there is a term limitation of six years, as I read that — a maximum of

six years. That means that every six years, at a minimum…. Maybe my math is

wrong on this. At a minimum, every six years there will be a brand-new board and

no continuity.

Hon. J.

Reid: In

section 6(3) the member will note that there are staggering

provisions so that, indeed, as these appointments are made, they're made for

different lengths of time. As the board goes through the processes, there is,

again, what we believe to be very important — continuity.

MacPhail: Thank you for that.

[ Page 5625 ]

Section

5(5) says: "A director of the Authority is removed as, and ceases to be, a

director of the Authority on the passing of a resolution to that effect by the

remaining directors." What's the history of that clause?

Hon. J.

Reid: In the event of a conflict of interest or incapacity, this gives the

board the ability to act.

MacPhail: By history, I meant: is this out of the Company Act? Are there

other jurisdictions that use this as a model for removal of board appointments?

Hon. J.

Reid: We have drawn this from the Company Act, the Utilities Commission Act

and the Hydro and Power Authority Act. I can't say how common this is, but there

is history.

[1540]

MacPhail: Perhaps the minister could describe what the passing of a

resolution means. Is it by simple majority, or is it by two-thirds or

three-quarters?

Hon. J.

Reid: It would be simple majority.

Section 5

as amended approved.

On

section

MacPhail: I don't know whether my question has been resolved by the

amendment the minister just passed under

section 5. But as I read

section

6(2)…. It says that the way the process gets started is under 6(2). Maybe this

is where my confusion came in about how the whole thing gets started, because it

says here: "On or before the expiry of the term of the first directors of

the Authority, the Lieutenant Governor in Council" — government, cabinet

— "is, subject to

section 12, to appoint 2 qualified individuals as

directors, and must promptly notify the directors of the Authority of those

appointments." That's just to start the process of the government-appointed

directors. They're not the first ones to be appointed. Then everything flows

from there.

Hon. J.

Reid: The member is correct in that. This is just the mechanism that

government will use to appoint its two directors, but those directors do not

have an influence on the decision-making or the selection process.

Sections 6

and 7 approved.

On

section

MacPhail:

Section 8 deals with conflict. As I see it, it's conflict by

directors, conflict rules that apply to the directors of the authority. Where

has this language come from?

Hon. J.

Reid: Once again, we drew from the Company Act, the Utilities Commission Act

and the Hydro and Power Authority Act.

MacPhail: Has that language in those acts ever been tested?

Hon. J.

Reid: I'm sorry. I don't know the answer to that.

MacPhail: I do. It has, under the term of my government. It was quite

scandalous, as a matter of fact.

Interjection.

MacPhail: Sorry. It's absolutely not true that my whole government was

ridden with scandal — absolutely not true. Perhaps the Minister of Human

Resources will live to regret that comment with his own conduct to people with

disabilities.

Interjection.

The

Chair: Order, members. Order, please.

MacPhail: Where does the language "beneficial interest" come from?

What is the legal

interpretation of beneficial interest?

Hon. J.

Reid: We will get that information for the member, and we will get the right

staff person to provide the right information.

MacPhail: It's just a term that I'm not familiar with. Clearly, the

qualification of "beneficial" must have legal meaning. Perhaps just

while the legal people are listening…. How much interest, in what, can a

director have and still be a director? That is the nature of my question. But I

will wait for that answer.

Will there

be standards of conduct for board members?

Hon. J.

Reid: Yes, there will. The board will deal with that.

MacPhail: Under the previous government there were broad, general standards

of conduct for all board members. Does the current board have standards of

conduct under this government?

[1545]

Hon. J.

Reid: The board will have to draw up their bylaws. Those bylaws would be

based on best practices in the corporate world and certainly be incorporating

the different measures that the member is discussing.

Interjection.

Hon. J.

Reid: If we just take a moment, I will be able to answer the member's

previous questions in just a moment.

The

beneficial interest that the member was questioning…. There can be two types

of owners. There can be a registered owner, and there can be a beneficial owner.

They're not necessarily the same. This beneficial

[ Page 5626 ]

interest captures both, so even a person who isn't a registered owner but is

receiving a benefit would be captured by this.

MacPhail: And the registered owner is captured as well.

Thank you

for the distinction, but where is the registered owner captured? Is that in the

first line, where it says: "Subject to subsection (5), every director of

the Authority who, in any way, directly or indirectly…"?

Hon. J.

Reid: Correct.

MacPhail: Okay. Perhaps the minister could explain 8(5) that talks about….

Well, perhaps she could just explain it.

Hon. J.

Reid: This

section is to capture the occasion where a person would have

potential conflict if they were heavily invested in a mutual fund that was

dominated by transportation interests. So it is to, again, look at that

eventuality or that possibility and try and capture it here.

MacPhail: So will part of the process of determining qualified individuals

be for them to submit their financial holdings?

Hon. J.

Reid: They would have to declare if there was a conflict.

Section

8 approved.

On

section

MacPhail:

Section 9 is application of the Company Act. I assume this is

application of the Company Act to directors, because I think later on there's a

section that talks about…. I was asking about the conversion of the B.C. Ferry

Corporation, and I was pointed to

section 19.

[1550]

The

minister can explain what these sections from the Company Act mean. I thought we

passed a new business corporation act at some point. Is it that it's not

proclaimed yet, and that's why we're using the term "Company Act"?

Hon. J.

Reid: We're just taking a moment to get that answer.

In the

meantime, I will respond to another part of the question, and that's in

section

9, the reference sections of the Company Act apply to the authority directors,

persons disqualified, register of directors, powers and functions, duties,

validity of acts of directors, resolution of directors in writing. Those are the

references.

MacPhail: Mr. Chair, I can wait for the answer about the name of the act.

The only

reason I raise it…. I mean, it's fine if we have to make an amendment to the

Business Corporations Act, but I thought there were different sections too. I

mean, we changed the sections under the act as well, with the new Business

Corporations Act.

Hon. J.

Reid: The Business Corporations Act is not yet proclaimed, so the Company

Act prevails.

MacPhail: Are these sections from the old Company Act? The sections that are

referred to in this Company Act, in this legislation, will have to be amended

consequentially, I suppose, when the Business Corporations Act is proclaimed.

But are these sections replicated in the Business Corporations Act?

Hon. J.

Reid: The answer is yes. When the act is proclaimed, there will be

consequential amendments.

MacPhail: I can do this research, but I assume, then, that the intent of

this clause will remain the same even with the new Business Corporations Act.

Hon. J.

Reid: Yes.

Sections 9

to 12 inclusive approved.

section

MacPhail:

Section 13 is the role of directors. What's the model used to

establish the role of the directors?

Hon. J.

Reid: This is modelled on a standard corporate model, and it's driven by the

mandate of the authority.

[1555]

MacPhail: I might be confused here, but 13(1)…. The reason why I asked

that question was, of course, because we do have Crown corporations where the

CEO is the chair. In fact, in the B.C. Ferry Corporation, the CEO is the chair.

Section 13(1) refers to the B.C. Ferry Corporation, but isn't it the B.C. Ferry

Authority that we're talking about? Am I confused?

Hon. J.

Reid: This

section is referring to prior to conversion. It's still the B.C.

Ferry Corporation. Upon conversion, it becomes B.C. Ferry Services.

MacPhail:

Section 13 refers to prior to the conversion to the authority,

which occurs April 1? If it does, then the government is in violation of this,

because the CEO is the chair.

Hon. J.

Reid: There's a technicality here. The act is proclaimed prior to

conversion, so the references to B.C. Ferry Corporation…. It's a technical,

legal procedure, because upon conversion, all of this then would apply to B.C.

Ferry Services.

MacPhail: Okay. Look, I don't understand it, but my questions are on the

record. I assume that greater minds than mine are straightening all of this out

[ Page 5627 ]

except that 13(1) is pretty key because this government has a history of

saying CEOs are chairs. I understand I made a mistake in this particular

situation, because I think the CEO is Mr. Doug Allen, so that's not the case

here. But it is the case at Hydro, and it's the case at ICBC. The two largest

corporations have the CEO as the chair. I take it that the legal officers of the

government have this all straightened out.

Section

13(6) says: "The directors must make public the location of the Authority's

head office." Is there a possibility that the authority's head office will

not be Fleet House?

Hon. J.

Reid: The necessity here is that the records of the authority need to be

available, so it's important for people to know where the authority's head

office is. That's why it's included. The intent of the board for this next year

is that, while within transition, the head office will be remaining in Victoria.

MacPhail: I'm sorry, I missed that part. The head office will remain in

Victoria? I didn't hear the last part.

Hon. J.

Reid: The intent of the current board in the transition is that the head

office this next year would remain in Victoria.

MacPhail: Okay. Well, Fleet House has a long history to it. I certainly hope

that history continues.

[1600]

You know

what would help me greatly? The corporation did provide me with this, and I just

don't have it in my binder here. It was a diagram of how the authority relates,

etc., because this next section…. I'm wondering whether they have an extra

copy of that. It was like a chart. That might help me. My apologies. The

corporation did provide me with that, and I just don't have it here. The next

question here is on…. Oh, sorry. Are we on

section 14 yet? Okay.

[H.

Long in the chair.]

Hon. J.

Reid: We will get the chart and provide it to the member.

Section 13

approved.

section

MacPhail:

Section 14 is remuneration for directors. Now, does this

section

apply to the directors that will be in place…? What directors does it apply

to?

Hon. J.

Reid: This applies to the authority directors.

MacPhail: Okay, so perhaps the minister could explain 14(2)(b). It says:

"if, on any day for which the director" — which I assume is of the

authority — "is not receiving remuneration from British Columbia Ferry

Corporation, the director performs directorial services for the Authority, the

director is entitled to remuneration for that day equivalent to the daily

remuneration that may be paid to a director of British Columbia Ferry

Corporation for performing a similar service."

Hon. J.

Reid: For the first year the directors are the same on the authority and

B.C. Ferry Services, so this avoids them getting paid twice.

Sections 14

to 17 inclusive approved.

section

MacPhail: Will annual general meetings be conducted? I notice this says that

the authority must hold an annual general meeting within six months after the

end of each of its fiscal years. Is that the same requirement as under the

Company Act?

Hon. J.

Reid: We're not sure whether it's four or six. We're getting that

information right now to answer the member's question precisely.

MacPhail: This question may be appropriate to

section 19, but I'll ask it,

and if it's appropriate to

section 19, the minister can just answer it under 19.

I note here that the annual general meeting must be open to the public; subject

to reasonable restrictions imposed by the directors, the public can address the

meeting; and directors must place the annual report before the annual general

meeting. These are provisions that are also available under the Company Act,

soon to be the Business Corporations Act.

[1605]

If this

corporation is being privatized, why do we need this legislation? Why can't we

just do it under the…? I understand why we need it for transition, but why do

we need this legislation if the corporation is really a private model under the

Company Act?

Hon. J.

Reid: This legislation is largely about transparency, about people being

able to understand the conversion. The member would note that the majority of

this legislation, by far, relates to the creation of the authority and the

authority holding the share. Certainly, very little of it relates to B.C. Ferry

Services, because the member is correct: it will be governed under the Company

Act.

MacPhail: Okay. I appreciate this chart the minister has sent over. Of

course, the new business structure doesn't have the B.C. Ferry Corporation in

it. My questions still apply about where it will be that…. Let me ask this. I

assume there will be a CEO of the authority?

Hon. J.

Reid: There won't be a CEO of the authority. It's just the board.

MacPhail: Who will be the head guy operating it — or person or woman?

Where will that person reside on this chart, and what will her title be?

[ Page 5628 ]

Hon. J.

Reid: The operation of the ferries takes place under B.C. Ferry Services,

and the authority is the governing entity over B.C. Ferry Services. That

authority has the board structured with coastal representation, etc. The CEO

comes in under the B.C. Ferry Services and on the operational side.

MacPhail: I know we've passed

section 13, and I don't plan to revisit the

vote on it, but 13(1), where it says: "The directors may appoint one of

their number as chair but in no event may the chief executive officer of the

British Columbia Ferry Corporation be the chair of the directors of the

authority…."

Let me ask

this question: can the CEO of B.C. Ferry Services be the chair of the B.C. Ferry

Authority?

Hon. J.

Reid: The answer is no.

MacPhail: How would I know that from this legislation?

Hon. J.

Reid: Everything that applies to B.C. Ferry Corporation continues after the

conversion into B.C. Ferry Services.

MacPhail: Fair enough. Do we know that from

section 19? I'm just looking for

it. Sorry.

Hon. J.

Reid: We have very publicly stated that the new corporation will be B.C.

Ferry Services Inc.

Section 19 refers to the conversion. We stated publicly that

the name of the new company will be B.C. Ferry Services Inc.

Section 19, indeed,

talks about that conversion.

[1610]

MacPhail: I just think that for public transparency, it would be nice

somewhere in the legislation to have the words "B.C. Ferry Services."

I can't find it anywhere. I know I'm not the test for people who can understand

these things, but a lot of the documentation in this legislation, and the reason

why it exists here, is to explain the conversion.

I'm getting

confused by the fact that the first 18 clauses refer to the B.C. Ferry

Corporation and limits on the directors there and the relationship of that to

the authority, when indeed in the new model, starting on

section 19, the new

business structure is the relationship between the Ferry Authority, B.C. Ferry

Services and the regulator. It's just a suggestion that perhaps that link could

be made in legislation. It's not necessarily the name that I'm interested in.

When the previous government established the Greater Vancouver Transportation

Authority, that transportation authority changed its name or named itself

differently, but at least the legislation was transparent on that front.

Section 18

approved.

section

MacPhail:

Section 19 is the conversion section, conversion division, where

the B.C. Ferry Corporation will no longer exist, and the new structure is

created under the Company Act. This

section also says that on conversion the

Ferry Corporation Act is repealed, and without limitation the corporation ceases

to be an agent of the government, and the Minister of Finance ceases to be the

fiscal agent for the corporation. My first questions are on whether the business

structure and the financial arrangements regarding the coastal ferry services

contract have been approved by the auditor general.

Hon. J.

Reid: The auditor general has been extensively consulted and worked with and

has been provided briefings and briefing materials on the B.C. Ferries

restructuring as it has developed. Based on these consultations, the auditor

general has confirmed that he supports the proposed accounting. The auditor

general's final review will be when he releases his opinion on the

summary

financial statements of the province in 2004.

MacPhail: How would I know that the auditor general supports this? How would

the public know it?

Hon. J.

Reid: I am telling the member that this consultation has occurred, that the

auditor general has confirmed his support of the proposed accounting. I suppose

if the member wants further confirmation, she's free to talk to the auditor

general.

[1615]

MacPhail: Yes, I will do that. Here are the questions that either the

minister can answer, or the auditor general can. There is a history around

auditors general allowing relationships between government and various

government-provided services to be severed or not. That relationship is

determined by the financial link between the commercial, privatized corporation

and the government.

The coastal

ferry services contract is a $105 million, 60-year continuous link between

government and the new corporation. Proportionately, that is a much stronger

link than existed between the government of the day and Skeena Cellulose, for

instance. Skeena Cellulose, as I understand it, was issued an opinion by the

auditor general that it was not a separate enough link from the government to be

declared a separate and privatized entity.

These kinds

of things are very important, because it would only be the auditor general's

opinion confirming the separation of government and corporation that would allow

the corporation's debt to be off-book.

Hon. J.

Reid: The criteria that we've been looking at and discussing with the

auditor general are based around the issue of control. In this particular set of

circumstances, the authority and B.C. Ferry Services are separate from

government. The issue of control and the criteria around control are defined in

accounting practices and in the accounting profession.

[ Page 5629 ]

With regard

to the contract, the contract is a fee-for-service, and that's not seen as an

issue of control. As well, while we have a 60-year lease, it's a five-year

commitment within those 60 years.

MacPhail: Yes, but a fee-for-service can also be determined to be rent. It's

a relationship where a service is provided, and the government pays the

corporation for that service.

I mean, I'm

fine if the auditor general has signed off on this, but I'd sure like to know

how it distinguishes from other decisions that the auditor general has made in

relationship to the Ferry Corporation. The minister herself has been floating

how there were previous deals examined, so she must be familiar with where the

auditor general has declared certain financial arrangements — where

construction is going to be off book, but there's going to be a leaseback or a

contract for those services — to not be sufficient separation to allow for

that debt to be off-book.

The rulings

that the auditor general made around Skeena Cellulose Inc…. This government

made a big deal about having to write down that debt, etc. — a huge deal. I'm

just wondering how this particular situation has been distinguished from those

past decisions by auditors general. How would I find that out?

[1620]

Hon. J.

Reid: We certainly have done a lot of analysis of this. We can provide the

member with the criteria that we have used for the analysis and how we have come

to that conclusion.

I certainly

understand the member's concerns. Those were certainly government's concerns as

well. We have worked through this process quite diligently. I think one of the

factors is that the debt of the B.C. Ferry Corporation was taken on by

government a number of years ago. Its debt is considerably lessened, moving

forward into the new model.

MacPhail: No, I'm not worried about the current debt. This is about future

debt that will be incurred by the corporation. In fact, I think the whole reason

why this model is being set up is to make sure that future debt incurred in

building ferries will be off-book. It's not about anything in the past. It's

about the future.

I'm not

quite clear. Was the minister offering me the criteria of the auditor general?

That's great. I would like that, if I may, before the estimates, so we can

explore that at the time.

I also make

note that unless I missed something, and I'm not absent from this House very

often, the House Leader hasn't appointed and allowed for the convening of the

Public Accounts Committee. He promised he would. The previous Public Accounts

Committee asked for that to be done urgently. It still hasn't happened, and

we're a third of the way through this session. I'm quite curious as to why that

is. Perhaps the minister could urge the House Leader to convene the selection

committee so that the Public Accounts Committee can be appointed. Until that is

done, none of these questions can be asked. Certainly, it's a blight on the

record of the government in terms of the work of this Legislature.

Under

section 19,

section 19(4) allows for the creation of subsidiaries. It also says

it will "…establish a subsidiary for its maintenance and refit

operations." I assume that's the work that's currently done by Deas dock.

Perhaps the minister could confirm that. Does it incorporate any other work done

elsewhere, physically, by the corporation?

Hon. J.

Reid: Yes, this is in reference to Deas dock. The only other subsidiary is

CFI, which will get collapsed. This

section does allow for the creation of other

subsidiaries in the future for good business reasons.

MacPhail: Do successor rights apply? Sorry, Mr. Chair, I'd better make that

clear. Do successor rights under the Labour Relations Code apply to the creation

of this subsidiary?

Hon. J.

Reid: Yes.

MacPhail: In the briefing, the corporation staff talked to us about pension

and benefits, etc. Can the minister, for the record, explain what work is being

done to ensure a proper succession of transfer?

Hon. J.

Reid: I would ask that we deal with that when we get to the

section under

employees, which is just a few sections long. I'm sure there will be other

questions with regard to employees.

Section 19

approved.

section

Hon. J.

Reid: Hon. Chair, I move the amendment to

section 20 that is in the

possession of the Clerk.

[SECTION

20,

(

a) by deleting the proposed subsection (3), and

(

b) by renumbering the proposed subsection (4) as subsection (3).]

On the

amendment.

[1625]

MacPhail: Is this adding or changing what has to be provided in the terms of

service plans? Perhaps the minister could explain the amendment. It's just the

amendment to

section 69 that I'm interested in.

Hon. J.

Reid: I'm not quite sure of the member's question. There are the three

amendments:

section 20,

section 30 and

section 69. If she's referring to

section

69, do you want that explanation when we get to

section 69, then?

MacPhail: Oh, sorry.

[ Page 5630 ]

Hon. J.

Reid: We're on

section 20 now. The question I have is: did she want an

explanation around the amendment to

section 20 at this moment?

MacPhail: Yeah, I'm sorry, Mr. Chair. All my amendments are on the same

page, but I see there are three separate amendments. My apologies. Yes, that's

fine.

Amendment

approved.

Section 20

as amended approved.

Sections

21 and 22 approved.

section 23.

MacPhail:

Section 23 talks about the transfer of employees to the

maintenance subsidiary.

Section 22, just for the record, talked about transfer

of all other employees. Perhaps the minister could explain, in the context of

section 23, what the provisions are now for working with the union about

transfer of employees in relation to wages, working conditions and benefits.

Hon. J.

Reid: With the agreement of the pension trustees, all new employees will

continue to be covered in the public service pension plan at a minimum to April

30, 2004. All existing employees will remain under the public service pension

plan as well. With regard to all the other benefits, all the other benefits

continue.

[1630]

MacPhail: So the terms of the collective agreement apply beyond the benefits

as well?

Hon. J.

Reid: Yes, successorship applies.

MacPhail: What's the expiry of the collective agreements?

Hon. J.

Reid: October 31, 2003.

MacPhail: That's an interesting date, because of course, the new authority

board — the new board, not the interim board — will not be in place. So how

does bargaining take place?

Hon. J.

Reid: The bargaining is conducted between B.C. Ferry Services and its

employees in every normal way. It's not done with the authority.

MacPhail: Yes, but it's the authority that has to ratify the contract.

Anyway, it'll just make for an interesting round….

Interjection.

MacPhail: Sorry? The board of directors doesn't have to ratify the contract?

Well, who does?

Hon. J.

Reid: It's the board of the new company, B.C. Ferry Services.

MacPhail: Oh, I see. So there will be…. Well, let's back up a step, then.

The board of directors of the B.C. Ferry Services is different than the board of

directors of the authority. Am I right? Is that what the minister was saying?

Hon. J.

Reid: They are two separate legal entities. They could have the same

members. They potentially could have different members on those two boards. The

board that has to ratify will be the B.C. Ferry Services.

MacPhail: Sorry, could the minister point out to me…? Is it under the

Company Act, then, that the board of the B.C. Ferry Services is established?

Hon. J.

Reid: Yes.

MacPhail: And the government will have no input into that board whatsoever,

then?

Hon. J.

Reid: It will be determined by the authority, not the government.

MacPhail: Okay, we're looking at this in terms of ratification of collective

agreements; that's why I'm discussing this. The collective agreement expires

while the interim B.C. Ferry Authority board is in place and the new Ferry

Authority board isn't in place. So the B.C. Ferry Services operating company

will have its own board of directors established by the Company Act, and they

will be the ones determining ratification of the collective agreement.

Hon. J.

Reid: The answer to the question is yes. However, the board of the B.C.

Ferry Services will initially be the same as the board of the authority.

[1635]

MacPhail: Sorry, I apologize for being so thick here. Could the minister

refer me to a model elsewhere that I could look at where there's that

relationship? B.C. Ferry Services is the holding company; it's not the

subsidiary. I was trying to think about whether this was the same as the

relationship between the GVTA and TransLink board of authority, and then there's

several operating companies beneath that have their own boards of directors —

except that B.C. Ferry Services is the holding company from which subsidiaries

flow. Am I correct?

Hon. J.

Reid: I want to clarify the role of the authority and B.C. Ferry Services

and any subsidiary. The authority is there to provide the overall governance,

and it holds the voting share. It provides the governance.

We then

have the B.C. Ferry Services. This is not a holding company. This operating

company, in the

[ Page 5631 ]

model…. If we look at the airport model, they're one and the same. Here

we've separated them so that they're not one and the same. There is that

distance; there is that independence. There is that differentiation between.

Any

subsidiary — for example, Deas dock maintenance — would then have its own

board of directors. That board of directors would be determined by B.C. Ferry

Services.

MacPhail: Again, this goes back to my point. B.C. Ferry Services isn't

mentioned anywhere in the act — not that I can find — unless the government

has combed through and can point to me where B.C. Ferry Services is listed. B.C.

Ferry Corporation is listed, but there is no conversion other than the ferry

corporation to the authority. When I was asking for other models…. Even the

Vancouver Airport Authority model isn't this.

[1640]

The board

of directors for the B.C. Ferry Services will be determined…. Come April 1,

it's going to be the same board as the B.C. Ferry Authority. Isn't that kind of

like a magic line, like the dotted line between the two is irrelevant? If

they're both the same board, if there's no legislative protection for the B.C.

Ferry Services board of directors, why separate them? It certainly isn't

separated in reality.

Hon. J.

Reid: I did want to respond to the question about B.C. Ferry Services Inc.

and where that appears. It was in my second reading address, in talking about

B.C. Ferry Services. As I mentioned earlier — for the purposes of legislation,

because this gets proclaimed technically before the conversion — all the

wording here legally has to refer to B.C. Ferries Corp, which then gets rolled

into B.C. Ferry Services. I apologize that I hadn't made that point earlier, but

it was in my second reading address.

There are

differences between the authority and the B.C. Ferry Services, and there's a

difference in the roles. During the transition they are the same members, but

there's no need for them to be the same members in the future. The roles are

such that the authority has the role and the members of the board of the

authority have the role to act as shareholder and governance in that aspect.

The members

of the board of the B.C. Ferry Services act as operating and looking over the

operations of B.C. Ferry Services. Certainly, there is a difference in that

approach, that role and those responsibilities. So while during the transition

the boards are one and the same, there is no need in the future for that to be

the case.

MacPhail: Perhaps the minister, then, could explain. If in the future

they're not one and the same, how does B.C. Ferry Services operating company

board of directors get appointed?

Hon. J.

Reid: Under the Company Act, by the authority who is the shareholder.

MacPhail: So for all intents and purposes, for this round of negotiations in

late 2003 it will be the B.C. Ferry Authority that will be ratifying the

collective agreement, because it's the same as the B.C. Ferry Services operating

company board of directors. Yet I assume that board of directors is the same

board that will be changed come April 1, 2004. Has the minister contemplated

that in determining collective bargaining — the expiry of it? It does seem to

me that it's almost as if negotiations will take place….

The reason

why this is important is because I think the wage bill is fully a third of

operating costs or maybe even more — no, about a third of operating costs.

It's a huge bill. Is it not possible, then, that the collective agreement could

be renegotiated without the approval of the new board or without the

acquiescence of the new board which will be appointed three months later?

Hon. J.

Reid: I am somewhat puzzled over what the issue is. Let me be clear, because

there are legalities involved. There is a separation between the board of the

authority and the board of B.C. Ferry Services after transition, after the

changes here. Yet they are the same people, so we have to be careful to say that

it is the board of B.C. Ferry Services that will be responsible for the

contract. Indeed, yes, they are the same people, but there is a legality there

— so just to clarify that.

[1645]

Yes,

there's ongoing business. Yes, there will be a labour agreement that has to be

reached. Yes, subsequent to that, there will be changes in the board. Yes, those

are the practicalities as we move forward. I'm not sure what is disturbing to

the member about these realities.

MacPhail: Well, I asked the minister at the very beginning why the necessity

for a year of an interim board. That was to provide consistency. There was a lot

of business to be done. But we have a situation here where fully one-third of

the operating costs of the authority, which is theoretically independent, will

be predetermined by the interim board. It could either tie the hands of the

future board or be unduly harsh on the employees, which wouldn't be the wish of

the permanent board. It does seem to be a bit weird that the interim board will

be responsible for determining fully one-third of the operating costs.

I may have

that figure underestimated, by the way. I thought it was around a couple of

hundred million dollars or maybe $280 million — the wage bill and benefits —

out of about a $600 million operating cost. That's what I remember, but I could

be wrong.

That huge

chunk of operating costs would be embedded for quite a period of time and then

handed over to the independent authority. That's all I'm saying. If one wants to

give true independence to the authority, perhaps that should have been

considered in the timing of the transition.

Hon. J.

Reid: There is a transition period. That transition period does include

labour negotiation. Labour

[ Page 5632 ]

negotiation is just that: negotiation. Moving forward, there will be more

labour negotiations in the future under different boards of directors. Again,

it's a reality; it's a business practice. I have confidence that they're going

to be able to conduct themselves with their employees in a manner that's going

to work. Obviously, it has to work. The employees are very valuable for the

ongoing success of this new entity. Again, the answer is yes. These will be the

directors, and the new corporation will have to negotiate that contract. We have

to learn how to live together and move on — yes.

MacPhail: Is the new permanent authority board appointed April 1, 2004,

legally required to assume the contract negotiated by the interim board?

Hon. J.

Reid: Yes.

Sections 23

and 24 approved.

section

[1650]

MacPhail:

Section 25 is entitled "Essential service designation and

other Labour Relations Code matters." There are two pieces of legislation

that govern the ability of the employees of the Ferry Corporation to carry out

free collective bargaining. One is under the Labour Relations Code, and the

other is under, I think, the B.C. Rail and B.C. Ferry act. Someone get me the

name of that, if they can. Honestly, I'm having a mental block here. It's

an act

that applies to B.C. Rail and to B.C. Ferries, and it's

an act that allows a

cooling-off period.

Anyway, so

those two provisions affect collective bargaining. Perhaps just while the

minister is looking up the information of what that other act is, she can

explain how the declaration of B.C. Ferries as an essential service under this

legislation does not take away the right of B.C. Ferry Services employees to

withdraw their services subject to Labour Relations Board rulings.

Hon. J.

Reid: I believe the name of the act the member was looking for is the B.C.

Railway and Ferries Bargaining Assistance Act. There's nothing in the Coastal

Ferry Act, the legislation, that would prevent an application for the

designation of essential services from being made regarding B.C. Ferry Services.

MacPhail: Under that act, the B.C. Rail…. A designation of essential

services under the act the minister just said or this act? Okay, yes. Sorry,

when the minister stands up and answers the question, if she could repeat the

name of the act, and maybe I'll remember it. So that act is still in existence

and still has full force and effect? My concern here is that this act, Bill 18,

in addition to the act that the minister just listed, declares B.C. Ferries an

essential service and then says that Bill 18 prevails over the Labour Relations

Code. Currently, it's my understanding that employees of the B.C. Ferry

Corporation have the ability to withdraw their services, or the employer has the

ability to lock out employees subject to going to the Labour Relations Board and

having essential services designated by the Labour Relations Board. What changes

with this act? What changes that process, given that Bill 18 now supersedes the

Labour Relations Code?

Hon. J.

Reid: This act just clarifies this particular point. It makes it clear that

the delivery of ferry services is an essential service under the Labour

Relations Code and that the level of that service would still have to be set by

the Labour Relations Board. We have the two past awards by the Labour Relations

Board that have set essential service levels, so the process would still be the

same. It would be the Labour Relations Board that would set that level of

service.

Section 25

approved.

section 26.

[1655]

MacPhail: Again, for clarification, this

section is entitled "This Part

prevails over collective agreements." There are two parts to it. The first

part says: "A collective agreement that conflicts or is inconsistent with

this Act is void to the extent of the conflict or inconsistency."

questions are on the second part: "If a provision of a collective agreement

requires British Columbia Ferry Corporation to negotiate with a trade union to

replace provisions of the agreement that are null and void or materially altered

as a result of legislation, that provision is deemed not to apply in respect of

this Act." As I read this in the best possible light, the act prevails over

a collective agreement. The second part says that if the collective agreement

says…. There are sometimes clauses in collective agreements, as I recall, that

say if any part of this collective agreement is changed by legislation, the

employer is required to negotiate the effects of that change.

Is it that

kind of clause that the second part of 26 refers to and basically says if that

kind of provision is in the collective agreement, that provision remains legal

and enforceable in the collective agreement?

Hon. J.

Reid: Yes, the member, I believe, had the right context here. This

section

is written to address one known aspect where the collective agreement is in

conflict with the legislation, and that's the appointment of directors. The

legislation provides for a nomination from the union of one director, and the

collective agreement provides for two. With regard to provisions, they do remain

with regard to all other acts. They would be ongoing and enforceable.

Section 26

approved.

section

MacPhail: I'm happy to have a discussion around the service contract in

estimates, or I'll tell the minister the questions I'm asking. I assume the

coastal ferry

[ Page 5633 ]

services contract which covers off sections 27, 28 and 29 refers to the top

part of the chart of the new business structure that says "Coastal Ferry

Services Contracts." I'll just assume that's what it refers to.

This is the

fee-for-service that will be paid by the province to the B.C. Ferry Authority. I

understand from the government announcement and from estimates with the Minister

of Finance that the value of that service contract for at least the initial

couple of years is $105 million. Perhaps the minister could confirm that.

Hon. J.

Reid: The amount is $105.5 million for each of the first five years.

MacPhail: What is the total operating budget of the corporation now? Is it

about $660 million or something?

Hon. J.

Reid: Approximately $450 million.

[1700]

MacPhail: Oh, I'm sorry — $450 million. Sorry, I had that wrong. How much

is the wage bill?

Hon. J.

Reid: The wage bill is about half.

It would be

helpful if the member could give me some indication of where she's going with

questions around contracts, so I can give her a better context.

MacPhail: It was a throwback to my previous question about how much the wage

bill is — how much of the wage bill is the total operating costs of the Ferry

Corporation.

So $105

million of a $450 million operating budget comes from the government. I'm happy

to do the contents of the service contract in estimates, but the Minister of

Finance couldn't provide it for me and referred me to the Minister of

Transportation.

I'm fine to

do it under estimates. It will be the nature of not only what services are

provided for the $105 million but the amount of the services — whether they're

new, just recently recognized or have been long established. What I mean by the

category of "just recently recognized" is that perhaps the Ferry

Corporation is now being paid for school bus service, etc.

On the

question of the power to enter into contracts, who is it that signs the

contract? After the establishment of the new authority and the establishment of

the commissioner, who is it that actually negotiates the contracts and signs the

contracts?

Hon. J.

Reid: On behalf of government, it would be the Minister of Transportation.

MacPhail: Well, what role will the commissioner…? The government

negotiates the service contract with whom?

Hon. J.

Reid: It would be with the chair of B.C. Ferry Services.

MacPhail: That contract is…. How will it be made public?

Hon. J.

Reid: The contract will be made public.

Again, I'm

not quite sure of the context — whether the member wants to know if it's going

to be on the website or however else we make things public. It will be a public

document that people will have access to and will be able to freely examine.

Maybe I

should just clarify this. The government, the minister responsible, would

negotiate with B.C. Ferry Services that contract or any changes to that

contract. That contract is overseen by the commissioner, so the commissioner has

a role to make sure and certainly can have that discussion. The actual contract

— the contents of that contract — is determined by government.

MacPhail: My questions will flow further on this when I talk about the

Freedom of Information Act under

section 83 of the legislation, but I just

wanted to confirm that the contract itself would be made public.

Sections 27

to 29 inclusive approved.

section

[1705]

Hon. J.

Reid: Hon. Chair, I move the amendment to

section 30 that's in the

possession of the Clerk.

[SECTION

30, by deleting the proposed definition of "improvements".]

On the

amendment.

MacPhail: What's the intent of this amendment, please?

Hon. J.

Reid: Taking out "improvements." The improvements are included in

"land," so this is just not required.

Amendment

approved.

section

30 as amended.

MacPhail: As amended. I'm fine.

Section 30.

This is a transfer of assets to the B.C. Transportation Financing Authority,

which is a government entity and will be on the government books. Perhaps the

minister could explain what stays in the public domain.

Hon. J.

Reid: It would be the water lots and the lands that remain in the public

domain.

MacPhail: What will be the relationship between British Columbia Ferry

Services and the government in ensuring access through government-owned assets

to British Columbia Ferry Services?

Hon. J.

Reid: There are a number of accesses — for example, continuing highway

lands. This will all be stipulated in the lease document.

[ Page 5634 ]

MacPhail: I assume that because the minister has said that the services may

not just be limited to British Columbia Ferry Services but that there may be

other service operators, all service operators will have equitable access?

Hon. J.

Reid: The lease will be with British Columbia Ferry Services, and then it

would flow from British Columbia Ferry Services if there's other access.

MacPhail: Something that drives me crazy about my telephone bill is the fact

that I can now use long-distance services, but in order to get them through

Telus, I have to pay a fee for that access. It drives me crazy as a consumer,

but it's been all through the CRTC and all of that, so I have to have that.

But it is a

way. It's acknowledged as a way of a stutter step where the first person in, who

has the original monopoly, has a way of controlling access through billing of an

access fee. Is that available to British Columbia Ferry Services — being able

to charge an access fee to competitors?

Hon. J.

Reid: I want to clarify "access." There are several different

accesses we could talk about. One is land access — so the roadways, for

example, that will be stipulated in the lease to make sure those accesses are

available. The other is access to terminals by other operators of, say, ferry

systems or other vessels.

[1710]

To answer

the question around other access on the water, that indeed would be…. The

lease is with British Columbia Ferry Services. British Columbia Ferry Services

has the contract with government to provide the core ferry services, so ultimate

responsibility is with British Columbia Ferry Services. If they enter into a

business arrangement for other access, they still have to make sure that the

contract they have with government is fulfilled first and foremost. That's what

our greatest concern is, of course, with that contract. If they have other

business arrangements, they would be able to enter into those other business

arrangements.

Section 30

as amended approved.

section 31.

J. Bray:

Section 31 speaks about leasing of ferry terminal properties. I just have a few

questions on this section. It's written with some legalese. I'm wondering if the

minister could just clarify, in general, what the intent of

section 31 is.

Hon. J.

Reid: This enables government to enter into the lease with B.C. Ferry

Services. It also enables the government to enter into any future arrangement,

so if there is a new ferry service that government wants to enter into an

arrangement on, or a new terminal site, government has that ability as well.

J. Bray:

Earlier the minister provided some information on some of the

definitions, which

I found very helpful. During second reading debate there was some talk about the

ability for this act to create some competition, some opportunities for improved

service. Is there anything in

section 31 that prevents the ability of the Ferry

Services operating company to enter into subleases with other operators to

provide, if I could ask, service on designated routes?

Hon. J.

Reid: The member is correct in the concept of greater competition. We'll get

into that in further sections here of how we facilitate or ensure that

competition takes place. There is nothing here that prevents B.C. Ferry Services

from entering into those arrangements.

J. Bray:

Then my last question on

section 31. Given that the Ferry Services operating

company, acting as a service integrator, may well be dealing with other entities

with respect to designated routes and route clusters for services, is there

anything in

section 31 that would limit the ability of the Ferry Services

operating company to actually look for other opportunities for revenues by

subleasing or going to subleases for companies to be providing services on

non-designated routes — in other words, to be able to leverage those assets

for entrepreneurs who are looking for other opportunities to get into the

operation of marine ferry services?

[1715]

Hon. J.

Reid: There's nothing in this

section that precludes the concepts the member

was referring to, but I would like to mention again that because of the contract

government has or will have with B.C. Ferry Services, that takes a priority.

Whatever other business arrangements B.C. Ferry Services wants to enter into and

whatever other competitive provision of services is encouraged, in fact, by the

commissioner, we have to keep in mind that the core services will take priority.

That indeed is the arrangement that government primarily has with the future

B.C. Ferry Services.

Sections 31

and 32 approved.

section

MacPhail:

Section 33(3) allows for the expropriation of land necessary for

the provision of core services. Who applies for the expropriation — the

government or the B.C. Ferry Services?

Hon. J.

Reid: The future B.C. Ferry Services would make application to government.

Then it would be up to government to decide whether indeed the expropriation was

in the public interest and then to use the mechanisms available to proceed.

MacPhail: There's nothing in

section 33 that provides for compensation. Does

the Expropriation Act apply?

[ Page 5635 ]

Hon. J.

Reid: Yes, it certainly does.

MacPhail: How would we know that, given 33(2), which says: "If the

minister is satisfied that the action…proposed by the ferry operator is

reasonable and necessary for the provision of core ferry services, the minister

may (

a) take the proposed action, or (

b) take any other action, mutually agreed

between the minister and the ferry operator, that the minister has power to take

under one or both of the Highway Act and the Ministry of Transportation and

Highways Act"? There's no reference to the Expropriation Act in the

legislation.

Hon. J.

Reid: Under the provisions of these acts, it does require compensation.

While these are the powers, certainly compensation is part of that mechanism.

MacPhail: Does compensation flow from one of these two acts — either the

Highway Act or the Ministry of Transportation and Highways Act — or does it

flow from the Expropriation Act?

Hon. J.

Reid: For my immediate answer, practically speaking, the expropriation

compensation flows together. With regard to these particular acts and their

particular sections and their linkage to the Expropriation Act, I would have to

get detailed information on how those linkages work. We're certainly willing to

provide the member's office with that information as we procure it for her.

Section 33

approved.

section

MacPhail:

Section 34 deals with liability. We had a very extensive

discussion around liability in the last session around the Highway Act, and I

note that all of the concerns — my concerns about changes in liability and the

government basically opting out of liability, particularly here under 34(2) and

34(3) — are the same concerns that I have.

[1720]

For the

record I must be clear on this. There were liability provisions enacted in the

last session under the Highway Act about which I had serious concerns. The

minister and I debated those at length, and I actually voted against them. The

liability under this legislation, as it's articulated under

section 34(1), (2)

and (3)…. Well, actually, subsections (1), (2), (3), (4), (5) and

(6) encompass the same liability changes, and I had the same concerns — exactly

the same concerns. We will refer to that debate that occurred in the last

session, and I will vote against this on division.

Hon. J.

Reid: I'd just like to make note for the record that the act the member is

referring to, where the debate took place, wasn't the Highways Act. It was the

Transportation Investment Act.

MacPhail: Thank you. I appreciate that.

The same

concerns I had with the transportation and highway act are replicated here, and

it will be on the basis of that debate that I will be voting against this

section.

Section 34

approved on division.

section

MacPhail:

Section 35 begins division 1 of

part 4 that establishes the

British Columbia Ferries commissioner. The ferries commissioner, I assume, is

modelled after the B.C. Utilities commissioner. Or is there another model that

it follows?

Hon. J.

Reid: This is a different model than the BCUC, and this commissioner is

separate. It's a stand-alone. The commissioner does not serve at pleasure, and

this is an incentive form of regulation.

MacPhail: I note that there's no ability to remove the commissioner, which,

on the one hand, is a good thing. But what happens if we have a rogue

commissioner that everybody agrees is a rogue commissioner?

Hon. J.

Reid: We would have to wait until the term ends. We would have to live with

that person.

Sections 35

to 37 inclusive approved.

section

[1725]

J. Bray:

Section 38 talks a bit about the role of the commissioner. I'm just wanting to

explore that for a minute or two, because I think there are some unique features

here — just to make sure I understand.

Section

38(1)(

a) states that the priority is to be placed on the financial

sustainability of the ferry operators. My understanding is that relates somewhat

to an answer the minister provided for me earlier. I'm just wanting to make

sure, though, that it is certainly not the only avenue the commissioner will be

looking at. I'm wondering if the minister could just comment on that particular

point.

Hon. J.

Reid: I think those details are listed in the act. There is financial

sustainability, but also, the ferry operators are encouraged to adopt the

commercial approach and to seek additional alternative service providers to be

competitive. I'd just refer the member to the different details on that section,

because indeed the role of the commissioner is much broader.

J. Bray:

Thank you for that.

subsection (3) it says: "ferry operators are to be encouraged to seek

additional or alternative service providers on designated ferry routes through

fair and open competitive processes." It is my understanding, then, that

this is one of the roles the commissioner will be ensuring — that the Ferry

Services corporation is

[ Page 5636 ]

operating in a way that is going to encourage and foster entrepreneurs and

other interested people who are going to be looking to provide marine ferry

services, to ensure that the primary company, in fact, is looking to enhance its

ability to provide service in competition.

Hon. J.

Reid: I want to clarify the member's question with him. Subsection

(3) refers to ancillary services, such as parking, etc. With regard to our….

J. Bray:

It's (c). Sorry.

Hon. J.

Reid: Okay, the member, then, would be looking at 38(1)(

c) and talking about

the competitive processes. The company is commercially oriented. The

commissioner's role is to make sure that the new B.C. Ferry Services is looking

at all possible ways to deliver cost-effective services. Certainly, the ability

for other people to provide those services has to be considered. The

commissioner will have a role in considering what B.C. Ferry Services has done

to engage alternative service providers and, indeed, to provide cost-effective

services.

MacPhail: It's my view, pursuant to the question raised by the member from

Beacon Hill, that the way this legislation is written, it clearly says:

"priority is to be placed on the financial sustainability of the ferry

operators." It is the only clause that's listed as a priority, and

therefore it prevails, and everything else follows from it. I expect that's the

way the commissioner will be forced to interpret the legislation.

[1730]

The role of

the commissioner is going to be to determine fees and tariffs charged for riding

ferries. The commissioner is provided with the list of factors he or she has to

take into account. One of the factors he or she will have to take into account

is that "cross subsidization from major routes to other designated ferry

routes is (

i) to be eliminated within the first performance term of the first

Coastal Ferry Services Contract to be entered into under this Act, and (ii)

before its elimination, to be minimized."

understand the first contract is five years long. This will be an interesting

aspect of the new structure of the authority, where there are four board members

or directors who come from various regional districts, because there are

regional districts where cross-subsidization is the order of the day for ferry

service.

Perhaps the

minister could…. Does the minister have a list of routes that are

cross-subsidized?

Interjection.

MacPhail: The list of routes that are subsidized.

Hon. J.

Reid: I'm going to answer the member's question in reverse, to say which

routes are not subsidized. There are three routes that don't receive the subsidy

at the present time. They are routes 1, 2 and 30 — route 1 being Tsawwassen to

Swartz Bay, route 2 being Horseshoe Bay to Departure Bay and route 30 being

Tsawwassen to Duke Point.

MacPhail: So all other routes are subsidized, and the subsidization has to

be eliminated in the next five years is how I read this. No?

Hon. J.

Reid: The fee-for-service continues on with all those other routes to

provide for that service, so all that's being restricted here is that the

profits from these particular routes won't be directed towards the other routes.

The contract that government will have with B.C. Ferry Services provides the

funding in order to ensure the delivery of those services.

MacPhail: Yes, except that this particular clause has to be read in

conjunction now with 38(1)(f), as well, which says: "the designated ferry

routes are to move towards a greater reliance on a user pay system so as to

reduce, over time, the service fee contributions by the government."

So the next

shoe to drop is that the service fee contributions are going to be reduced over

time for those routes. You're absolutely right that it's a two-step process, but

it's a two-step process to say that on the subsidized routes, people are going

to be paying a lot more.

Hon. J.

Reid: Government acknowledges that there will be routes that will always be

receiving government money to support them, but we do believe there is the

possibility of a greater independence in some routes. That is the encouragement

that we want to see over time — that where it's possible, where it's feasible,

those routes become more independent, with less reliance on taxpayer support.

Certainly, that is the intent, but obviously there will always be routes that

will rely on that taxpayer support.

MacPhail: Well, Mr. Chair, I predict that at the end of the five-year

contract, even during the five-year contract, there will be major fee increases,

tariff increases, to routes that are now currently subsidized.

[1735]

Section

38 approved.

section

MacPhail:

Section 39 provides for tariff increases, price increases, to

ferry service. It is for the first performance term. Perhaps the minister could

clarify: does the performance term start April 1, 2003, and run to March 31,

2008?

Hon. J.

Reid: Yes.

MacPhail: So the fee increases that occurred this past November are not

included in this averaging?

Hon. J.

Reid: That's correct.

[ Page 5637 ]

MacPhail: I think we had a tariff increase of about 3.9 percent —

something like that — in November of 2002.

Hon. J.

Reid: It was 3.8 percent.

MacPhail: Thank you — 3.8 percent. Now, this legislation allows for no

more than a 2.8 percent increase each year on major routes and no more than a

4.4 percent increase each year on other routes. Let me see. That means over five

years, the maximum increase can be 14 percent for major routes and 22 percent

for other routes. Is that right, or is there a possibility that some routes

actually will increase more than that because these are average percentage

increases?

Hon. J.

Reid: The route has to adhere to that average, but there is the flexibility

— as long as it averages — on any given route to charge more, say, for peak

times and less for off-peak times as long as it doesn't exceed that average

that's been set.

MacPhail: And is that per route, or is it per route group that averages are

determined?

Hon. J.

Reid: The average is determined per route group.

MacPhail: So, indeed, the overall fares for one route, at every point in

time, could be higher than the average?

Hon. J.

Reid: There's a possibility it could be higher, but that would require that

some then be lower.

MacPhail: And on the major routes? I notice it refers to the route group of

major routes, so is the same premise for major routes applicable? In other

words, one major route overall fare increas