May 9, 1985 ALBERTA HANSARD 889 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Thursday, May 9, 1985 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF VISITORS MR. TRYNCHY: Mr. Speaker, we have in your gallery today a special group of people. We all know that 1988 will be a special year in Alberta when we'll host the 15th Winter Olympics. This group of gentlemen whom I've worked with for quite a long time is just doing a tremendous job for Alberta and Canada. They are Frank King, chairman of the board; Bill Pratt, general manager; Jerry Joynt, Dan Russell, and Jim Acton.

I ask that the House give them a rousing welcome. head: INTRODUCTION OF BILLS Bill 271 Retail Business Holidays Plebiscite Act MR. MARTIN: Mr. Speaker, I beg leave to introduce Bill 271, the Retail Business Holidays Plebiscite Act.

This Bill would require that in the next provincial general election or the next provincewide plebiscite, whichever first occurs, the following question be put to Alberta's electors: "Do you favour the introduction of legislation to provide that major retail business shall close on either Saturday or Sunday in each week and on statutory holidays?" [Leave granted; Bill 271 read a first time] Bill 270 Public Service Opportunity Act MR. MUSGREAVE: Mr. Speaker, I would like to introduce Bill 270, the Public Service Opportunity Act.

The purpose of this Bill is to provide the opportunity for civil servants to take over government services and operate them for a profit. To do this, the proposed takeover must, first of all, provide the government service for three years at one-half the previous cost, prove that the public service will not create any disadvantage to the public, and finally, guarantee the level of service to the public will be equal to or better than existing services. [Leave granted; Bill 270 read a first time] Bill 268 Safe Drinking Water Act MR. GURNETT: Mr.

Speaker, I request leave to introduce a Bill, being the Safe Drinking Water Act. This Bill relates to the concern for water quality that's general across this province and, besides the statutory requirement that drinking water be safe, would deal with such matters as the process by which an independent board would draft regulations related to that.

It would deal with the actions that would need to be taken in the event that public water supplies were found to be unsafe, and it would form a water advisory council to replace the existing Water Resources Commission, which would be abolished. [Leave granted; Bill 268 read a first time] head:TABLING RETURNS AND REPORTS MR. HORSMAN: Mr. Speaker, I'm filing with the Assembly copies of the correspondence between the Prime Minister of Canada and the Premier of Alberta and between the hon.

Minister of Justice and myself with respect to the consti­ tutional amendment respecting Senate reform, a notice of which appears in Votes and Proceedings today. Copies will be made available for all members of the Assembly. head:INTRODUCTION OF SPECIAL GUESTS MR. PENGELLY: Mr. Speaker, it's my pleasure today to introduce 38 students from the Salem Christian Academy. They are accompanied by their group leader and principal, Mr. George Loney, and teachers Mrs. Barb Sapzko, Mrs. Madeline Brundage, and Mr. James Wong. They are also accompanied by parents Mr. and Mrs. Doug Bryce and Mr.

Doug Sapzko and three staff members, Miss Jeri McPhail, Kevin Unrau, Ed Semph, and their bus driver, Fern Lamoureux. They are seated in the members' gallery. Would you please give them a warm welcome. MR. CLARK: Mr. Speaker, it's a real pleasure for me today to introduce to you and through you 32 students from grades 8 and 9 from the Hussar school. Hussar happens to be my home town, so I'm especially proud to be able to introduce these fine students. There are also a few relations interspersed in among them. They are accompanied by their teachers, Robert Rudolf and Peggy Rainville.

They are seated in the members' gallery, and I would ask them to rise and receive the welcome of the House. MR. HYNDMAN: Mr. Speaker, today I have the pleasure of introducing a group of very active and young-thinking folks from the Society for the Retired and Semi-Retired. They call themselves the Wiwaxy Wanderers, after a moun­ tain near Lake O'Hara. In addition to making various trips around the city of Edmonton, they are active in hiking at Lake O'Hara and cross-country skiing in Kananaskis Coun­ try. There are about 14 of the 30 of them here in the public gallery. Their leader, Mr.

Wilfred Johnson, resides in my constituency, which is why I have the privilege of introducing them. I ask that they rise and receive the welcome of the Assembly at this time. head:ORAL QUESTION PERIOD Health Care Insurance Payments MR. MARTIN: Mr. Speaker, I'd like to direct the first question to the Minister of Hospitals and Medical Care. It has to do with the recent annual report. Has the government undertaken a study to indicate why payments from the

890 ALBERTA HANSARD May 9, 1985 Alberta health care insurance plan keep escalating to where 150 doctors, I understand, are now collecting over $0.5 million from this fund? MR. RUSSELL: Mr. Speaker, I think some of the charts and statistics in the report show what is happening. Albertans are receiving more and more services each year as the years go by. That's been historic. It's referred to as the rate of utilization. We're all receiving more services, there are more of us, and the unit cost of each service is going up. So we're bound to get the results to which the hon. member refers. MR.

MARTIN: Well, that's a matter of opinion. Let me just go from there. The rate of utilization is up; agreed. From this report it looks like there's about a 7.2 percent increase in the number of practitioners while there was approximately a 1 percent drop in the population. My question to the minister has to do with the rate of utilization, particularly because we have a 12.5 percent increase. Could the minister indicate if his department has an explanation for this? Is the number of physicians affecting the increase in that rate of utilization? MR. RUSSELL: I suspect it is, Mr.

Speaker, and I suspect the doctors recognize that Alberta is a well-governed prov­ ince and a good place for them to practise. MR. MARTIN: It looks like it. They certainly make good money. Perhaps we can have more physicians and more utilization, so we can all pay more. Mr. Speaker, my question is to the government. I ask this in a serious manner to the minister. This is a rapid increase. The minister has talked about his concern about medicare and its escalating cost, but I don't see any concern here.

Is the minister not concerned about this growing trend of more physicians and more being taken out of the medicare system? MR. RUSSELL: Mr. Speaker, I feel I've spoken ad nauseam on the rising costs of health care in the nation. As a nation we have to face that. On the other side of the balance books is a $35 billion or $38 billion deficit, so we're getting a lot of these services on borrowed money. People seem to want them, demand them, and are willing to have that kind of financial picture at the end of the year.

I think we have spoken up on many occasions trying to bring home the costs of health care services to our citizens. We're going to need everybody's participation and help if there's going to be any kind of concentrated effort to do something about the cost control of the system. We have been running a test project in Red Deer with respect to issuing statements to people as they leave doctors' offices, so that they are at least aware of the value of the service which they receive. We've also experimented in doing that with hospital visits, so that patients receive statements when they leave the hospital.

Those have certain limited effec­ tiveness insofar as cost controls are concerned. On the positive side is the other thing, Mr. Speaker. Advancing medical technology is opening up more and more by way of cures and keeping people here for many, many years longer than they used to be. I think that is a bill that society as a whole is going to have to recognize. The very success of medical technology means there are more cures for more things and there are more of us staying around here longer to participate in the system. MR. MARTIN: A supplementary question. We all appreciate that, I'm sure.

But to look at it from a different aspect, while physicians are billing more and more out of the medicare system — I notice we have a 12.5 percent increase; it's due to the increase perhaps — we have an 18 percent increase in revenue from premiums last year. My question to the minister: has the government any projections that would indicate that premiums will have to go up in the near future to cover these increasing payments to physicians? MR. RUSSELL: No, Mr. Speaker. Historically the records show that we try to maintain about a 30 percent contribution from premium revenue toward the cost of the plan.

The provincial governments over the years have been putting more and more in. The cash transfers from the federal government as a percentage of the total cost have been rapidly decreasing, and this has been a point of major concern to the provinces. From time to time the health care premium levels are of course assessed. Provinces that don't have health care premiums have to look other places for their revenues, so they adjust gasoline taxes or sales taxes or those things we don't use here. I know of no plans this year to raise the health care premiums. MR. MARTIN: A supplementary question.

"This year"; I said, "In the near future." If we're not prepared to work on it in this end, and more and more is coming out, it's got to come from somewhere. The question I was getting to, though, to go into the rate of utilization again: in view of the amount of money physicians are collecting, is the minister now prepared to review the 1983 study commis­ sioned on Alberta surgical rates? We seem to have a high surgical rate. They cited the whole fee-for-service method of payment as a possible reason for our high surgical rates.

Has the minister specifically reviewed, as part of the problem we're facing here, the method of payment, the fee for service? MR. RUSSELL: Certainly, Mr. Speaker, we're willing to review anything at any time. Without meaning to sound facetious, I do want to point out that reviews of these practice profiles are going on all the time, not only with respect to billing practices but to see if the system is adjusting itself to correspond to financial changes that have been made in it. As members can appreciate, it's a pretty delicate thing.

Historically the facts are that as the years go by, Canadians are availing themselves more and more of the services of health care professionals. MR. MARTIN: We appreciate that they're reviewing. My question following from that to the minister: is there any thought by the government at this time to looking at changes to fee for service as possibly being part of the problem we're facing with escalating medicare costs? MR. RUSSELL: Mr. Speaker, I'm glad the hon. leader raised that specific item.

We have asked the Alberta Medical Association to examine the policies of, one, a sliding overhead component and, two, a capping philosophy. They are of course not anxious to discuss those items, for obvious reasons. I'm interested to note that the B.C. Medical Asso­ ciation this year just recently signed an agreement which involves a capping policy. I think those things are bound to come in in various parts of the country from time to time, but at the present time I couldn't say what methods

May 9, 1985 ALBERTA HANSARD 891 would be used here to try to control utilization or expenses. There is a wide variety of options open. MR. MARTIN: A supplementary question, Mr. Speaker. In going through the reports — I'm sure the minister has — I note that for the second year in a row the largest increase in payments to practitioners has gone to oral surgeons: a 36.5 percent increase in 1984, on top of a 52.6 percent increase in 1983. Could the minister outline whether or not he's been able to determine why such an increase has taken place in this particular practice? MR. RUSSELL: No, Mr. Speaker, I can't.

There's a belief in some quarters that some new techniques and technologies carried out by dental and oral surgeons are bringing relief to symptoms and complaints that used to be treated by other kinds of practitioners. That's one theory. The hon. member is quite right; that is a very dramatic increase in that specialty. MR. SPEAKER: Might this be the final supplementary in this series. MR. MARTIN: Yes, Mr. Speaker. Just one other area. In the report I see that the number of applications for payment for medical services not available in Alberta virtually doubled between 1983 and '84.

My question about this to the min­ ister: has the minister looked into how many of these instances were infant cardiac cases which had to be flown out of Alberta because we had no unit in the province to deal with such cases? MR. RUSSELL: No, I haven't looked into it, Mr. Speaker, but I suspect that the hon. leader has identified the major source of that increase. There was a specialty service that was missing for several months and during that time those infants were flown to the Toronto Hospital for Sick Children. MR. COOK: A supplementary question, Mr. Speaker, on that point.

Could the minister also confirm that we have specialists in this province to whom people come from out of province? MR. RUSSELL: Yes, Mr. Speaker, it's a two-way flow. MR. COOK: A supplementary question. Could the minister indicate whether or not we're becoming more interdependent in Canada and North American as specialist teams assemble in certain facilities and serve the whole country? MR. RUSSELL: I think it's fair to say that that is a developing trend, Mr. Speaker.

I know there's been con­ sultation among hospitals and medical groups as to how many heart/lung transplant centres there ought to be for the country, as one example. I'm sure some of the other high- priced, exotic specialties are undergoing the same kind of scrutiny. MR. COOK: A supplementary, Mr. Speaker. Could the minister advise the House as to whether there have been any studies or reports done to suggest that it's reasonable to presume that Alberta should have all of the specialties and exotic surgery facilities here in the province so that no Albertans would have to go outside? MR.

RUSSELL: I don't know of any specific report that's dealt with that, but I think the answer is probably self- evident, Mr. Speaker. MR. MARTIN: Rollie comes through with some tough ones there. Edmonton General Hospital MR. MARTIN: It's my day with the Minister of Hospitals and Medical Care. I'd like to go back into another area that he's been talking about, the Edmonton General hospital.

My first question dealing with this area: has the minister been forwarded the petition signed by more than 71,000 people opposing the closure of the active care wings of the General hospital and has he had a chance to review the contents of this petition? MR. RUSSELL: Yes, I have, Mr. Speaker, and in my view the agreement we reached with the board this week responds to most of the concerns expressed in the petition. MR. MARTIN: A supplementary question to the minister. Could the minister indicate how he came to this conclusion, in view of statements attributed to people who were organ­ izing the petition?

They're not happy. MR. RUSSELL: There are three aspects to the petition, Mr. Speaker. Number one, I think many of the people signing the petition were not aware of what they were signing. I'm not trying to downgrade in any way the significance of a petition containing that many signatures. But I think it's inevitable, and we know because we've talked to many of them, that many people had very little understanding of what they were signing.

Another group who did sign I think were misinformed and were signing under beliefs that certain things were going to happen or about to happen that weren't contemplated by the government. So they were signing on the basis of probably well-meaning but still misinformed information. The third group of persons represented in the petitioners, as far as we can ascertain, were people who were very much concerned about the fact that they were going to lose very close by, across the street, immediate medical attention to emergency situations.

It's on that basis that I say I believe, based on the statistics we have, that 85 or 90 percent of those concerns will be responded to by the agreement that was reached. I use that figure because historically only 15 percent of the emergencies that have turned up at the General have required hospitalization; 85 percent of the persons showing up are treated, released immediately, and not admitted to the hos­ pital. Those kinds of cases will continue to be taken care of.

In addition to that, several of the outpatient clinics that have traditionally been there will remain and give that convenience of service to the public. There's going to be a day surgery program with examining rooms, diagnostic facilities, and the three operating rooms. So that kind of thing can happen. And then, of course, there's going to be, in my view, an incredibly excellent auxiliary and geriatric care centre of 480 beds that will respond to all the needs of the senior citizens, who constitute a very large percentage of the people that were concerned.

So when you take the thing in total, I think that as a well thought out, well debated, and considered compromise between ourselves and the board, it is a solution that responds to generally most of the concerns that have been expressed. MR. MARTIN: Mr. Speaker, I want to make sure I understand clearly what the minister is saying. Is he saying

892 ALBERTA HANSARD May 9, 1985 that the reason the government would not change its policy on this matter, even though 71,000 Albertans signed a petition, is that he felt they were misinformed or didn't understand the petition and that's why the government didn't move on this petition? MR. RUSSELL: Mr. Speaker, I didn't say that at all. I said that of the people who were informed and understood what was going on, I believe 85 to 90 percent of their concerns have been addressed. MR. MARTIN: A supplementary question, Mr. Speaker, if I may.

I think the minister would agree that the Friends of Edmonton General Hospital committee, the people who organized the petition, understand their own petition. They're saying very clearly that that is not the case. Upon what does the minister base that he now has 85 or 90 percent of the concerns of that petition settled? On what possible information does he have this? MR. RUSSELL: Mr. Speaker, I've just finished going through the list of programs that are going to stay there, and in talking to many of the petitioners, those are the kinds of things they were asking for.

I think it's important to recognize that of the area we're talking about, most of those residents have quicker access to emergency services by ambulance to the Royal Alexandra hospital or the Mack­ enzie Health Sciences Centre than people living in your typical suburban neighbourhoods. That area of the city is extremely well served by hospital programs, and the pro­ grams which are going to stay there I think respond and take away from most of the concerns that were embodied in the petition. MR. SPEAKER: Might this be the final supplementary by the hon. leader. I'm concerned about meeting even a short list.

We've used over a third of the question period time so far. MR. MARTIN: Thank you, Mr. Speaker. To follow up on this, would the minister have any indication of how the government would react if he was confident in his own mind that all the people who signed this petition weren't misinformed, that they actually knew what they were signing? Would 71,000 people then have caused the government to relook at their particular proposal? MR. RUSSELL: Mr. Speaker, I don't mean to divert the Assembly's attention to an argument about numbers.

I think it's a matter of record that if a problem or a concern is expressed, it doesn't matter if it's brought to the government's attention by way of a letter containing one signature or a petition containing 100,000 signatures. The essence of the problem, the concern, and the response to it are the important things. In my view, the concerns expressed by that petition have essentially been met by the programs we've agreed to, and there was enthusiastic agreement from the board of the General hospital and its medical staff. MR. R. SPEAKER: Mr. Speaker, a supplementary question to the minister.

I've been advised that the Royal Alex and Charles Camsell hospitals will not be able to accommodate the some 46,000 emergency cases, averaging about 130 per day, that are now looked after in the General until changes are made within those two emergency units. I understand that's on a six-year program. Could the minister confirm that or clarify those circumstances at the present time? MR. RUSSELL: Mr. Speaker, I believe we're giving the impression that we're going to be left with one less emer­ gency ward in this city.

That is not correct, because of course there's going to be a brand-new, modern emergency department open at the new Mill Woods hospital, which will take a tremendous load away from the University and the Royal Alex emergency wards that are now looking after that whole southeast and Sherwood Park segment of the metropolitan area. So it's not as if somebody has to take an overload; there's merely going to be a redistribution here. Automobile Insurance MR. R. SPEAKER: Mr. Speaker, my question to the Minister of Consumer and Corporate Affairs is with regard to auto insurance premiums.

Back in 1979 the Alberta Human Rights Commission indicated that insurance com­ panies were discriminating on the basis of age and sex relative to premiums. I wonder if the minister could indicate at this time whether the government is committed to assuring Albertans that auto insurance companies are going to revise their rates and classifications to eliminate this discrimination. MRS. OSTERMAN: Mr. Speaker, the hon. member raises a very important element of automobile insurance, partic­ ularly as it affects male drivers under 25.

The commitment I have made is to make sure that the public is fully aware of the information I am now in the process of gathering that relates to the new statistical plan the auto industry has in effect as of January of this year. It must be over two years ago that the superintendents of insurance across Canada asked the auto industry to put together a new plan which would give us a broader array of characteristics, if you will, that one might look at to judge driving risk on, and therefore possibly eliminate some of the classifications presently being used.

I think it's well known that I, as minister, am a little unhappy that it has taken the industry so long to bring this information together and put this plan in place, but we certainly intend to utilize it. Automobile insurance obviously can't be turned upside down overnight in terms of putting new classifications together, because we don't know the inherent risk in some of those classifications.

But for the information of the hon. member, we'll certainly be looking at that over the next few months, putting together some ideas as a result of our also looking at plans in various other jurisdictions, and asking for actuarial advice on what will happen if those plans are in place. My final comment, Mr. Speaker, is that if we believe the full cost of automobile insurance is being paid for by the entire public and that cost indeed reflects the risk, then we also know that if some people are to receive a reduced premium, obviously that of some others is bound to rise.

I think what we want most of all and what is most important is that it be absolutely fair. MR. R. SPEAKER: Mr. Speaker, a supplementary question to the minister in light of the comment. Does the minister or the government support the principle that a young driver under the age of 25 is innocent until proven guilty and on that basis pays the same individual premium whether male or female?

May 9, 1985 ALBERTA HANSARD 893 MRS. OSTERMAN: Mr. Speaker, I think all hon. members would support the principle that those who are the greatest risk on the road should pay the greatest premiums. MR. R. SPEAKER: Mr. Speaker, a supplementary question. Is the minister saying that on that basis, the present dis­ crimination occurring in terms of male drivers and female drivers under the age of 25 will continue in this province? From that answer I would gather that. MRS. OSTERMAN: Mr.

Speaker, it is premature to say what will continue in terms of what we believe to be fair, because I think there's a tremendous amount of information to be accessed that we haven't had at our disposal before. As I said, there are a number of new characteristics being added to the statistical plan that will hopefully allow us to further refine those categories. I said outside the House, I guess facetiously, that possibly we ought to develop some stats on whether blue-eyed drivers have more accidents than brown-eyed drivers.

I don't know what the hon. member is suggesting in terms of what an appropriate plan is, but I hope he has a suggestion that is backed up by actuarial advice, so that we all know we are not bringing in a plan and charging more to drivers who indeed have a good record. MR. R. SPEAKER: Mr. Speaker, a supplementary question to the minister. The plan I'm suggesting is that each individual be judged accordingly. What the minister is saying is that the insurance companies will base premiums on statistical records.

My question is: has the minister consid­ ered a system based on the individual's driving record, so that one individual is treated the same as any other indi­ vidual? MRS. OSTERMAN: Mr. Speaker, that's certainly among the considerations. MR. R. SPEAKER: A supplementary question. The minister also indicated in her earlier remarks that contact is being made with other provinces of Canada.

Can the minister indicate what type of consultation is going on, and will a plan such as the one I'm suggesting or other possibilities that the minister has suggested go into effect after agreement is secured by the other provinces, or will Alberta lead the way in terms of insurance premiums? MRS. OSTERMAN: Mr. Speaker, I've instructed the Super­ intendent of Insurance to make contact across the country. They do that on a regular basis, and that's how the requirements of the industry to put together a new statistical plan came about.

I have asked the Superintendent of Insur­ ance to speak to the other superintendents to find out what proposals provinces have. Apparently, it's possible that the Charter of Rights, for instance, has a different effect, depending on what type of regulation you have in your province with respect to the insurance that's mandatory. I will follow that up with a request to put this on the agenda of at least the consumer and corporate affairs ministers this fall.

To answer the other part of the hon. member's question, if other provinces do not appear to come to some definition about that, it's certainly my intention that we'll have a full debate here and have our principles and our suggestions on record before a case hits the Supreme Court of this country. I think all hon. members should be able to make their observations before a court ruling. MR. R. SPEAKER: Mr. Speaker, a supplementary question to the minister. In terms of the minister's answers, it seems that we have to wait until this statistical information and evidence and plans are put forward.

Our own Alberta Human Rights Commission has said there is discrimination in terms of sex and age. To the minister: is that not adequate information to make a decision at this point in time? MRS. OSTERMAN: Mr. Speaker, the problem is not with what all hon. members want to see in terms of fairness in automobile insurance; it's how to achieve that fairness. As I've said, I think most people would regard those drivers we believe to be high risks on the road to be the ones that should pay the highest premiums. The difficulty is in putting forward a plan or a grouping of people that will indeed put that into play. MR.

SPEAKER: I'm concerned about the passage of time. We've spent a good deal of time on this topic. If there is time, we can come back to it; otherwise, perhaps tomorrow. Hazardous Waste Disposal DR. BUCK: Mr. Speaker, my question to the hon. Minister of the Environment has to do with the Environment Council of Alberta's report. In the report it says that the era of concern for the environment is over, and at the bottom of page 4, Mr.

Minister, it says: Alberta's treatment facility is not only economically sound, it can be a positive attraction for enterprises that unavoidably produce hazardous wastes in their operations, and at present have no location in Canada that can provide an assured safe disposal method. In light of the fact that we are building a world-scale disposal plant in the Swan Hills area, can the minister indicate to this Assembly what discussions he has had with other ministers in other provinces to assure the people of this province that Alberta will not become the hazardous waste disposal centre of Canada? MR. BRADLEY: Mr.

Speaker, the hon. member has some very interesting introductory remarks to his question. He referred to our development at Swan Hills as being a "world­ scale" facility. I'm not sure where he got the impression that the facility was going to be world-scale. The facility is being developed to handle the wastes which are produced within Alberta. The purpose of this whole program from the outset was to develop a system within the province that could handle wastes created within the province. So we'll be setting up a comprehensive, integrated facility.

If the hon. member meant by world-scale facility that we would have a facility capable of handling wastes which are created within this province, then we are putting forward a com­ prehensive, integrated facility to handle wastes within the province. That has been the intent of the program. I think I've responded several times in question period as to what the intent of our special waste management system in the province is. It is to handle wastes generated within Alberta. That is the intention and purpose of the facility.

In terms of discussions with other ministers of the environment across the country, at various meetings when we've discussed the matter of where treatment facilities are, that has been communicated to them. The direction in which

894 ALBERTA HANSARD May 9, 1985 the ministries of the environment across the country have been heading is that each province would handle the wastes generated within their own province. The intent and purpose of the system in Alberta has been to handle Alberta-generated wastes. DR. BUCK: Mr. Speaker, I want it as clear as I can possibly get it from the minister. Is the minister assuring this Assembly and the people of this province that that facility being built in Swan Hills is to treat wastes in the province of Alberta only? Is that what he is assuring and reassuring us of? MR. BRADLEY: Mr.

Speaker, I don't know how many times I've responded in the House to the question of what the purpose of the facility is. I've responded that it is being developed to handle Alberta-generated wastes. I've also responded that on a need and request basis from another province, if there was a specific need which we may be able to handle in the future, we might consider it. But we are not developing the system to import wastes from other provinces to be handled on a regular basis. It's being developed to handle Alberta-generated wastes only.

If there was a specific need which we may be able to respond to, we might look at it at that time. Certainly, the system is being developed at this time to handle Alberta-generated wastes. There is not excess capacity being built into the system to handle other provinces' concerns. We are devel­ oping a scaled facility which will be economic to treat wastes generated in the province only. DR. BUCK: Mr. Speaker, the "need and request" is what bothers me.

Can the minister indicate what discussions he has had with industry in the province to see what portion of the costs the industries will bear when the facility comes on stream? Has there been any discussion so that the industries can get geared up to know what their costs and responsibilities will be for the disposal of their hazardous wastes? MR. BRADLEY: To supplement my previous answers, Mr. Speaker, I think there should be some recognition that over a long period of time Alberta has been exporting certain wastes to facilities outside the province to handle Alberta- generated problems.

We should be thankful that we have had the ability to ship certain materials out of this province so that they can be handled environmentally responsibly. Other provinces and states in the United States have taken wastes from this province. In terms of the cost of treatment, that certainly is something which is being reviewed in terms of the facility which is being put in place.

We do not have the treatment costs at this time, because that is something which the Alberta Special Waste Management Corporation is discussing with the proponent in terms of the treatment processes which are going to be put in at the Swan Hills facility to handle the wastes generated in the province. Once the treatment processes have been decided upon and we know what volumes are going to be handled at the plant, we will have a firmer hold on what the figure for treatment costs will be. DR. BUCK: Mr.

Speaker, was the province's taking of the PCB wastes part of this reciprocity that the minister is telling us about? MR. BRADLEY: Mr. Speaker, I think it's been well- debated in this Legislature and explained as to where we were heading with regard to our legislation. Prior to the enactment of legislation on March 13, we did not have an ability to preclude the continued importation of waste. We moved with that legislation. It's been well documented in this House. We moved with the implementation of that legislation well before the PCB spill in Kenora. Senate Reform MR. ANDERSON: Mr.

Speaker, my question is to the hon. Minister of Federal and Intergovernmental Affairs. It's further to statements attributed to the federal Minister of Justice wherein he is reported to have said that he opposes an elected Senate for Canada. Has the minister had an opportunity to confirm whether this is the policy of the government of Canada or a personal opinion of Mr. Crosbie? MR. HORSMAN: Mr. Speaker, I had an opportunity this morning to have a very lively conversation with the hon. Minister of Justice.

I should advise that this is one case when you shouldn't believe everything you read in the newspapers, because he assured me in the most colourful language possible, which I won't repeat in the Assembly, that it represents neither his personal views nor the views of the government of Canada. MR. ANDERSON: Along with other members, Mr. Speaker, I'm pleased to hear that report. Just for clarification, does this mean that it's the understanding of the government of Alberta that the discussions referred to in the

preamble to Motion 13 in our Votes and Proceedings will include discussions on all possibilities for Senate reform, including an elected Senate for Canada? MR. HORSMAN: Mr. Speaker, that is the gist of the correspondence between the Premier and the Prime Minister and between Mr. Crosbie, the Minister of Justice, and myself, which I tabled today. I might add that that was vigorously repeated today by the hon. Minister of Justice in his telephone conversation with me.

He wished me to be assured that there is no question that the federal government is approaching the subject of discussion of the Senate with an open mind and is fully prepared to discuss all aspects of the Senate during the course of the ministerial meetings which will be taking place prior to the calling of a full- scale first ministers' conference on the Constitution. MR. ANDERSON: Mr. Speaker, a supplementary question. Is the minister in a position to indicate when those ministerial meetings might begin? MR. HORSMAN: No, Mr. Speaker, at this stage I'm not.

Without reading into the record the correspondence which I've already tabled, hon. members will be aware that we have most strongly urged the federal government that the continuing committee of ministers on the Constitution to deal with Senate reform be inaugurated or instituted at the earliest possible opportunity. I think it is necessary for the resolution to first pass the House of Commons before such a committee could be established.

Certainly, with eight provinces willing to participate in this amendment now before the House of Commons, it would appear that it would be possible to structure a working committee within a very

May 9, 1985 ALBERTA HANSARD 895 few weeks or months so that the preparatory work can begin. Before I sit down, Mr. Speaker, I might add that the hon. Minister of Justice assured me that he is in receipt of the report of the select standing committee of the Alberta Legislature and that that would be one of the most carefully considered documents during the course of the review of this subject. MR. ANDERSON: Mr. Speaker, a final supplementary to the hon. minister for clarification. Is the minister indicating to the House that he is pushing for the fastest possible

schedule of discussions on the issue of Senate reform, so that Canadians can end this century of illegitimacy that's plagued the Canadian Senate? MR. HORSMAN: Yes, Mr. Speaker, that is the case. In fact, the correspondence will indicate that, and that has been the subject of my discussions with Mr. Crosbie in terms of both the meetings I've held with him and the telephone conversations, including the one most recently held this morning. Strathmore Housing Project MR. GURNETT: Mr. Speaker, my question is for the hon.

Minister of Housing, and it relates to a comment he made in the Assembly on April 23 with respect to owners of rural and native housing homes in southern Alberta. At that time he said: The one individual who was inadvertently offered another home has since changed his mind and has decided to stay in the original home as a result of these repairs being made. My question to the minister is whether he would indicate if, to his knowledge, such an offer was verbally made to all 40 of the Strathmore project homeowners and not just to a single family. MR. SHABEN: Mr.

Speaker, I'm not aware of offers being made to more than that particular individual. That offer was made in writing. I could check to see whether or not any verbal exchanges took place with employees of the corporation and advise the hon. member, but this one made in writing was the one I was aware of. MR. GURNETT: A supplementary question to the minister, Mr. Speaker. My information indicates that it would be a good idea to check about offers that had been made.

To the minister's knowledge, is it the case that the reason this family did not pursue another house was that the conditions set by the department were such that they would have had to settle for a smaller house than the house they originally had in the Strathmore project? MR. SHABEN: Mr. Speaker, for some time the corporation had under review the specifications and design criteria for houses that could be constructed under the co-operative housing action program.

As a result of that review and the determination that the program was designed and lent itself to modest type accommodation, the confirmation of those design specifications was made. So there was a concurrent change in specifications that occurred about that time. MR. GURNETT: A supplementary question to the minister then, Mr. Speaker.

Regarding the department's eventual offer to actually repair the deficient housing in Strathmore, were the homeowners there who had been lobbying for a couple of years for some kind of repairs or compensation given an ultimatum that they would have to accept the specific repairs offered by the department or receive no compensation at all? MR. SHABEN: Mr. Speaker, we went into this matter at some length during the study of the estimates of the Depart­ ment of Housing.

I should make it clear, and I think I said on that evening, that there was no legal obligation on the part of the government to undertake very extensive repairs and rebuilding of housing units, because the arrangements were made between a contractor and individual families.

However, since there is an involvement of two individuals who formerly worked for the Department of Housing and the matter is now before the courts, I felt that we had a moral obligation to provide very generous assistance to the homeowners by bringing those homes up to the highest possible standard, at a cost to the taxpayers of well in excess of $400,000 as well as providing the homeowners with a five-year new home warranty on their homes after the repairs are made. I think the offer of the department to the families was most generous. MR. GURNETT: A supplementary question, Mr. Speaker.

It's good to hear that the government accepts at least a moral obligation with regard to the matter and certainly would probably want the people to be as satisfied as possible with the service they receive. My question is whether the minister has undertaken any study of the matter to determine why the homeowners' lists of deficiencies and suggested repairs were not used as the basis for the repairs that have now been authorized by the department. MR.

SHABEN: In order to manage this very difficult problem as fairly as possible, the department retained on a contract a skilled outside contractor, a builder who under­ stands building, to thoroughly inspect every house and compare that inspection with the plans and specifications that the individual families agreed to and authorized him to enter into negotiations with those homeowners to bring those homes up to, at the very least, a standard that was specified in the plans that were developed and agreed to by the homeowners.

That's the result of several weeks of work by the consultant and discussions with the individual families. MR. GURNETT: A supplementary question, Mr. Speaker. Would the minister be willing to table for the Assembly the lists developed by the homeowners of the deficiencies they felt existed in the homes and the lists eventually approved for actual repairs to be made? MR. SHABEN: Mr. Speaker, I'll consider it. I haven't seen each list, although I would suspect that individual homeowners would attempt to achieve the best possible arrangement in terms of their negotiating with the consultant we hired.

My examination of the proposal presented to the homeowners indicated to me that the work was extensive, expensive, generous, and met the specifications of the orig­ inal house plans. MR. SPEAKER: Might this be the final supplementary on this question.

896 ALBERTA HANSARD May 9, 1985 MR. GURNETT: Yes, one final supplementary, Mr. Speaker. Will the minister confirm that all the repairs that will be undertaken on the individual houses will be completed for an individual home at one time and not in an extended, piecemeal way when the contractors are involved there? MR. SHABEN: Mr. Speaker, our intention is to cause a minimum of inconvenience to the homeowners. If at all possible, all the work will be completed by the end of June — and it is extensive — and the work will be co-ordinated in such a way to limit the inconvenience to the homeowners. MR.

SPEAKER: We've run out of time. I accept the blame for that. I think I recognized the hon. Leader of the Opposition for too many supplementaries this afternoon, but if the Assembly agrees, since I have mentioned the hon. Member for Edmonton Glengarry, with the indulgence of the House perhaps we might deal briefly with his question. Edmonton City Hall MR. COOK: Mr. Speaker, I promise to be brief. My question is to the Minister of Labour. A report sent to city council recently suggested that the city hall here in Edmonton is structurally unsound and unsafe. [interjection] I'm not talking about the council chamber.

Could the Minister of Labour, who is responsible for the building codes here in the province, assure the Assembly that the city hall in Edmonton is structurally sound? MR. YOUNG: Mr. Speaker, I'm always concerned that regulations such as the building code and the fire code may be wrongly blamed for some of the work that some people would like to have done on buildings. In this particular case I did have a check made of the report, and I am advised, first of all, that the building is not a poor building in any respect from a life safety point of view.

It does, in fact, meet the fire code, with the small exception of one committee room which has recently been constructed in a manner which is a little deficient. In short, Mr. Speaker, it appears that the reports, which are quite widespread today, were not very accurate reporting and are due to the fact that the building was constructed in 1955, occupied in 1957, met the city building code at the time it was constructed, and as with any building that has met a code, it is not necessary to make changes to meet revisions to the code until such time as a major restructuring or renovation would be undertaken. MR. R.

SPEAKER: Mr. Speaker, a supplementary question. Could the minister then give approval to Mayor Decore of Edmonton to shake the place as much as he wants? MR. YOUNG: Mr. Speaker, I can assure the hon. member that we understand that the building was built well over code. If the mayor wishes to jump up and down along with all members of city council, there'll be no problem as far as the stature of the building is concerned. ORDERS OF THE DAY MR. SPEAKER: Might we revert briefly to Introduction of Special Guests? HON. MEMBERS: Agreed. head: INTRODUCTION OF SPECIAL GUESTS (reversion) MR. NELSON: Mr.

Speaker, it gives me a great deal of pleasure today to introduce to you, and through you to members of the Assembly, 43 energetic grade 6 students from St. Wilfrid elementary school who come from one of the finest communities in Alberta. St. Wilfrid is respected for its high standards of teaching and community effort. Last Monday I met with the students for half an hour or so to discuss some items of interest. With them are teachers Mr. Gorman and Mr. MacDonald, and bus operator Brent. I'd like to ask that they rise and receive the warm welcome of the Assembly. MR. R. MOORE: Mr.

Speaker, it's again a pleasure for me to introduce to you, and through you to members of this Assembly, 31 grades 5 and 6 students from Clive school, situated in the constituency of Lacombe. I can assure the Member for Calgary McCall that this is just as fine an area as that fine area he spoke of a moment ago. They're accompanied by their teachers W.E. Sturgeon and S. Sawyer, and parents S. Anderson, H. Tees, and S. Law. I hope they're seated in the members' gallery. I can't see them up there, but I take it for granted they're there. I ask them to now rise and receive the traditional welcome of this Assembly. MR.

PAHL: Mr. Speaker, in the absence of my colleague the Member for Wetaskiwin-Leduc, it's my pleasure to introduce through you to members of the Assembly 45 grade 6 students from the Leduc East elementary school. They're accompanied by their teacher Mrs. Ward. Knowing the calibre of people in one of our newest cities, I have no hesitation in assuring members that they're equally on par with the other outstanding students introduced here today. I wonder if they'd rise from their places in the members' gallery and receive the welcome of the Assembly. MR. STEVENS: Mr.

Speaker, I don't often have the opportunity to ask you to recognize official representatives of the town of Cochrane, the home of the world famous MacKay's ice cream. In the members' gallery today are council member Wayne Hilland, town manager Martin Schmitke, and momentarily absent is Mayor Ian Brooker. I wonder if the other two gentlemen would rise and receive the welcome of the Assembly. MR. HORSMAN: Mr. Speaker, I move that motions for return 138 to 142, inclusive, stand and retain their places on the Order Paper. [Motion carried] head: MOTIONS OTHER THAN GOVERNMENT MOTIONS 215. Moved by Mr. McPherson:

Be it resolved that the Legislative Assembly urge the government to consider establishing a fixed contribution pension plan for new public service employees, so as to minimize the further growth of unfunded liabilities, reassure pensioners, and protect future Alberta taxpayers. MR. McPHERSON: Mr. Speaker, it's a pleasure for me today to propose Motion 215, which asks the government

May 9, 1985 ALBERTA HANSARD 897 to consider mechanisms to reduce or minimize the further growth of the unfunded liability present in the existing public service pension plan, which would reassure pensioners and protect future Alberta taxpayers. In dealing with public service pension plans, indeed any kind of pension plan, all members might recognize that it is a relatively complex area, at least I find it so. I hope I can do justice to some of the comments and ideas I would like to put forth for the consideration of hon. members on what I think is an important subject.

In order to do justice to the recom­ mendations behind Motion 215, perhaps it would be helpful to identify the problem that exists or clearly will exist in regard to the growing unfunded liability of the public service pension plan, not just in Alberta but in virtually all juris­ dictions in the western world. Mr. Speaker, the current pension plan sponsored by the government on behalf of its employees is known as a defined pension plan.

The essential elements of a defined pension plan are that an employee will receive a known and defined pension benefit derived from a formula based on a percentage of the employee's income, usually the average of his best five years' earnings, times his length of service times a percentage, normally 2 percent in the public service pension plan. In other words, the pension benefit under the defined pension plan is known, it's defined, but the costs of the plan are predicated on an actuarial valuation based on a number of assumptions about as far in the future as it's necessary to predict.

Oftentimes those predictions are extended into the future for up to 50 years. Moreover, government in this case bears all the risk and fully guarantees the benefit as well as fully guaranteeing any shortfall that may exist in the cost of the plan. Perhaps there's little need for me to describe to members the extent of the shortfall that exists. I think most members are well acquainted with the unfunded liability of the public service pension plan. In the 1984 report of the Auditor General, I note that the latest figures available indicate a total unfunded accrued liability of $2.722 billion at March 31, 1984.

It's worth noting here, Mr. Speaker, that the total liability under all the public service pension plans, six I believe, is actually some $4.876 billion. The pension fund balance, which was established in March 1981 as a direction of this government and was a direct transfer of $1.1 billion from general revenue to create a pension fund, has now grown to $2.154 billion from the original transfer. Basically, we have an unfunded liability of $2.722 billion. Mr. Speaker, there are a couple of reasons why the unfunded liability continues to grow.

I'm not referring to the extent of the funded liability as it is today, but there are a couple of basic, fundamental reasons why that unfunded liability will continue to grow in the future. First, the employer/employee contributions are less than the cost of the long-term accrued benefits. Secondly, no interest is paid on the unfunded liability. This is a key consideration because interest is always factored into the consideration of the cost of any accrued benefit in a pension plan.

I should hasten to point out and perhaps raise a caution about any notion that the problem could be completely solved by simply depositing enough money to eliminate or fully fund the pension plan. This measure would basically amount to an exchange of unfunded liability from the pension fund to direct government debt. Some jurisdictions have chosen to do that. Some have chosen the alternative of issuing government securities into the pension fund. However, those securities replace the unfunded liability debt with direct government debt.

While this would stem the growth of the pension liability because governments would then be paying interest on the securities into the pension fund, that measure would obviously increase government debt servicing costs and all the implications therein. Nonetheless, Mr. Speaker, the growing unfunded liability is an insidious problem, and the real costs will be inflicted on those who pay taxes in the long term; that means our children and our children's children. When pension plans are not adequately funded, the full effect of cost increases will not appear for some considerable time.

After the commitment is made, only a small part of the cost is visible today. It's left for future taxpayers to deal with. Mr. Speaker, a vast, unmeasured, unfunded liability is building up over Canada in the form of uncommitted pen­ sions. Some, like the federal pension plan, are indexed without limit. The Alberta public service pension plan isn't, as you know; thank goodness, in my view.

It has been known for some time, certainly since 1966 when the Canada Pension Plan was established, that the contribution rate to the Canada Pension Plan of 3.6 percent of employee benefits would be outstripped by payouts before the year 2000. Inflation has in fact pushed that figure ahead. I don't know where to, but it's certainly a concern for all Canadians. We don't have near that problem in Alberta because the pension plan is partially funded, and that fund is growing every day.

Also the employer/employee contributions have recently been increased in a very fiscally responsible measure by the Provincial Treasurer, so the estimates that I have heard — and they are rough, Mr. Speaker — indicate a concern for Albertans about 40 years down the road when benefits may exceed total contributions and taxpayers will be called upon to fund benefits for future taxpayers through the General Revenue Fund. How do we extricate ourselves from this looming fiscal concern and protect the viability of our employees' pension plan, as well as protecting future taxpayers?

There are a variety of mechanisms, Mr. Speaker. In my view, an answer lies in the essential elements of pension plans in the private sector. An interesting dichotomy exists under the Pension Benefits Act, whereby private pension plans in the private sector must be actuarially funded. They always have to be fully funded. But the government, which imposed the stan­ dards, does not itself meet the criteria it establishes for the private sector, from which its own economic strength obviously derives. The recommendation of this motion, Mr.

Speaker, is to establish a money purchase plan or defined contribution plan for new employees entering the civil service. I will be interspersing the words "money purchase plan" and "defined cost plan" throughout my comments today. Basically, they mean the same thing; they are the same thing. The money purchase plan is basically the reverse of a defined benefit plan, under which a cost is known, it's fixed, and the ultimate benefit is variable, depending upon the performance of the fund it has created by employer/employee contributions in the marketplace. Mr.

Speaker, I want to emphasize very clearly that this government meets its commitments. So let there be no mistake; this recommendation deals only with new employees as they enter into the service of the government and does not address any notion of replacing the existing defined benefit plan of the public service with a new defined contribution plan or money purchase plan. In 1977 the government of Saskatchewan established what is known as the new plan, which is in fact a money purchase plan. There are some interesting comments as to

898 ALBERTA HANSARD May 9, 1985 why the government of Saskatchewan established that plan. One of the comments I found interesting in reading some of the research material in preparation for this motion was that then Premier Blakeney travelled to New York and witnessed the disaster in the city with respect to their pension plans. When he came back to the province of Saskatchewan and investigated the matter, he found there was a considerable unfunded liability in the pension plan, growing at a very alarming rate, and shortly thereafter established the new plan.

I think there are a variety of important and tangible benefits in establishing a money purchase plan. Firstly, by definition, a defined contribution plan is fully funded, so there is no risk that the plan will not be able to meet its obligations. Stories like the Canada Pension Plan, which I've alluded to, and perhaps more dramatically, as I've also alluded to, the debacle of the New York City pension plan can hardly gain any credibility or confidence in defined benefit pension plans, particularly in the public sector.

The money purchase plan operates on the basis of a percentage of payroll, usually a contribution of 5 percent for employees and 5 percent for the employer. It is essentially a savings plan, and the growth of that fund is traced directly to the employee. At the time of retirement, which incidentally is made much easier before age 65 under a defined contribution plan, the employee can transfer his or her pension into a life annuity.

In that regard, since the funds in an individual's account represent the present value of the employee's pen­ sion, there is very little difficulty in arranging for full portability or early retirement, if that is desired, and I happen to think that is a desirable aspect. On the first point, Mr. Speaker, a new money purchase plan for new employees would virtually truncate any future growth of the unfunded liability in the public service pension plan, but not the established, existing unfunded liability. It would virtually eliminate any future growth to the unfunded liability. Mr.

Speaker, I think the second issue that has to be addressed is: what's in it for the employee? The first thing that comes to mind is that all employees are obviously taxpayers. All employees of the government are citizens and many are parents. Therefore, they have a common interest in eliminating any risk that their pension will not be able to meet its obligations and, moreover, that in meeting those future obligations, we don't overburden future tax­ payers.

Perhaps of more immediate interest is the fact that there is a large subsidy from existing employees who terminate their employment with the public service to those who retire on pension. Under the existing plan it's been revealed through statistics I recently read that for every employee who retired with full benefits under the public service pension plan, 10 employees never received the full benefits of their pension plan. Because they terminated early, they simply received their own contributions plus interest. I think it's an interesting statistic, Mr. Speaker.

Time doesn't permit me to go into any real detail today, but it's an actuarial reality that young employees who participate in a defined benefit plan actually pay more in contributions than the present value of their accrued benefits — period. There is a considerable amount of cross-subsi­ dization in a defined benefit pension plan. Young employees up to the age of approximately 40 actually contribute into the plan more than is required to pay the cost of their accrued benefit to that time.

Indeed, in many, many cases the employer contribution on behalf of employees is not even required to pay the cost of the accrued benefits for an employee up to a certain age. Employers' matching contributions made on behalf of an employee stay in the fund to pay pensions for those who receive them. In contrast to that, Mr.

Speaker, a money purchase plan based on a percentage of payroll guarantees a benefit to everyone who joins the plan, and since the fund in each individual account represents the present value of that member's pension, there is no difficulty in assuring that he or she will receive that benefit pension. Certainly, it provides for full portability. So one consideration is the fact that only about one out of 10 employees of the public service receives full benefits from the pension plan.

Another practical consideration is that because nominal interest rates follow inflation over time and the fund in a money purchase plan attracts nominal interest rates, they preserve the real value of the member's benefit from antic­ ipated inflation. I'd like to offer as a tangible example, Mr. Speaker, a pension comparison between a defined benefit plan and a money purchase plan for a male, age 25, retiring at age 65. For the defined benefit plan I've assumed a starting salary of $15,000 with salary increases, including promotion, of 6 percent.

Under those parameters this indi­ vidual will receive an annual pension of $90,897, based on the average of his best five years' salary, times years of service, at 2 percent a year. In comparison, in a money purchase plan the young man would have accumulated $782,333 in that fund. At today's annuity rates, checked yesterday, that individual could purchase a life annuity with a 15-year guarantee, producing an annual pension of $100,427. There is quite a difference.

If he chose to have that pension indexed at 4 percent compounded each year, which is certainly available, the annual pension at commencement would be $77,844. So we have a young employee of the provincial government, age 25, who could essentially provide himself with a pension of a little more than $100,000 a year, or if he wanted to have a pension that was indexed at 4 percent, he could commence benefits at $77,844 and that would increase on a compounded basis every four years for the rest of his life. There are some other distinct advantages of money purchase plans.

One, simplicity: employees can readily understand the value of their plan at any time; they can receive an annual statement of employer/employee contri­ butions to date, the current rate of return on the total fund, and perhaps even current annuity rates, to determine what their pension would be at any given time. It's certainly very simple and very easy to understand. Secondly, increased understanding of an employee's pension plan would encour­ age more individual responsibility for retirement planning.

Employees would have a proprietary interest in their accounts and, indeed, may wish to have input into the investment decisions. I think that's positive and should be welcomed. Third, since the funds in each individual's account represent the present value of a member's pension, full portability is easily accommodated. Fourth, because a money purchase plan is essentially age neutral, there is no concern by the employer of hiring older employees as compared to younger employees. So the plan, I think, will assist older eligible employees in that regard.

At the same time, short-term employees will not be penalized for leaving, which increases employee mobility in the public service, which in turn energizes the public service. I think that's good. Mr. Speaker, in considering a new money purchase plan for new employees, there is a wide range of benefits to employees and taxpayers. Yes, there are some drawbacks, which will probably be offered in debate by other members.

May 9, 1985 ALBERTA HANSARD 899 I look forward to that today. The chief negative in my view — and I think it would be almost irresponsible for me not to mention it — is that under a money purchase plan or a defined cost pension plan the participants bear all the inherent risk associated with accumulating capital for their retirement. But to balance that, I think it's fair to say that we're all part of the economy. In fact, the vast majority of private-sector pension plans are money purchase plans, so why should public-sector plans be any different?

I've also indicated that the marketplace will tend to anticipate the inflation rate over years, so in balance there are certainly good reasons for serious consideration of a money purchase plan which would provide funding directly into a plan allocated specifically for an employee and would accumulate over time. Moreover, I emphasize again, Mr. Speaker, that this motion urges a new plan for new employees only. Obviously, new employees would know the pension guidelines when they started service with the government. I think that is important. I indicated earlier the Saskatchewan plan, established in 1977.

It's my understanding that at that time the Saskatchewan government offered a voluntary incen­ tive for existing employees under the defined benefit plan to join the new plan, and they did in fact attract a goodly number of new employees. Apparently, they offered some­ thing like the average rate of return over the period of time the employee had been in the public service. They used that average rate of return and paid that to the employees as an incentive of drawing their money from the defined benefit plan over to the new money purchase plan. Mr.

Speaker, the thrust of this motion is to minimize the growth of the unfunded liability in the public service pension. On page 54 of his 1984 report, the Auditor General suggested ways to restrict growth of the unfunded pension liability. The last suggestion directly concerns Motion 215. I'd like to quote from the Auditor General's report: (vi) Finally, another way of controlling increasing pension liabilities is by introducing a defined contribution plan sometimes described as a money purchase plan.

Under such a plan, retirement benefits are limited to those that can be purchased with the accumulated combined employer and employee pension contributions and income earned thereon. As such, defined contribution plans do not have unfunded liabilities. Mr. Speaker, I understand that the transfer of the $1.1 billion in 1981 was arrived at by estimating what the fund would have been had the government retained and invested all the contributions by employers and employees into the plan at that time. That fund has grown to some $2.153 billion in that short period of time.

I think it's worth considering if indeed that existing fund and future contri­ butions and interest would be sufficient actuarially — and of course that would have to be determined — to meet the obligations under the existing public service pension plan. I am simply urging that in order to minimize, hopefully to truncate, the growth of the unfunded liability, the government consider as one measure of doing that establishing a new, fully funded money purchase plan for new employees. Mr. Speaker, I'm very much looking forward to the comments of my colleagues on this particular motion. MR. ZIP: Mr.

Speaker, I'm pleased to have the opportunity to speak on Motion 215 and wish to congratulate the hon. Member for Red Deer for sponsoring this motion. While it is limited in scope, it is nevertheless a move in the right direction and, as a result, very worth while. While listening to the very comprehensive discussion of this motion by the hon. Member for Red Deer, I find there isn't much left to say on it. There are, however, a couple of very important general observations I wish to make on pension plans as a whole which were touched on but not entirely covered by the previous speaker. [Mr.

Purdy in the Chair] The whole question of proper funding of public service pension plans by government and the lack of proper funding of public service pensions seriously cuts down the size of that much needed pool of savings that become available from this source of capital, both to industry and commerce. This, of course, works against lower interest rates and weakens business opportunities across the province and country. It also undermines the incentive to save on the part of the population.

Underfunded pension plans are another form of deficit financing that, along with the rest of government borrowing, is inflationary and reduces the return to savers. As I have previously pointed out in this House, the savers of this country have been subjected to a concerted assault by the interventionist policies of governments across Canada, especially the previous Liberal government in Ottawa. This has brought a wave of overtaxation, new taxes, and mounting public debts that are becoming unmanageable. We do not need to turn them off even further with underfunded pension plans. Mr.

Speaker, the saver is the forgotten person in our society. In view of the importance of savings to our economic system, it seems very strange to me that that is so. Nobody seems to question why all the socialist countries of the world run to the capitalist banks for their capital needs. They have destroyed the ability of their own people to save. Let us not fall into the same trap and destroy the ability of our own people to save.

Let us start paying attention to the needs of our savers, whose self-discipline and willingness to work hard and to sacrifice results in savings which must provide a reward to the saver in order to encourage him and others to save more. As I've said before, current inflation rates and taxes leave precious little earnings to savers. I'm surprised that people save at all nowadays. In view of this, and in view of the extent to which people are presently protected by our current system of social security, there seems to be little need to save.

At one time people used to save for a rainy day; now the government provides for so many rainy days that the incentive for people to provide for their own rainy day is largely gone. Let us not take away any more reasons for people to save. Let us think where this is leading us. The final point I wish to make on the importance of fully funded pension plans, Mr. Speaker, relates to the whole question of responsible government, which is a fun­ damental pillar of our democratic system.

Underfunded pension plans invariably, as I said earlier, become part of the future debt obligation that will have to be borne by future taxpayers. As the hon. Member for Red Deer pointed out on a number of occasions in his speech, these taxpayers have not been consulted about their willingness or ability to carry these financial burdens passed on to them by their imprudent fathers. Our forefathers, let us not forget, fought long and hard over the centuries for this all-important principle; it wasn't won in one generation.

A fundamental cause of the American revolution was the taxation of Britain's colonies in America without representation in Westminster.

900 ALBERTA HANSARD May 9, 1985 Now this principle, won at such great cost by the martyrs of democracy, sacrificed for democracy, is being lightly cast aside by reckless and irresponsible government spending through a rapidly mounting public debt. Underfunded pension plans form a substantial part of this future obligation. Mr. Speaker, I urge members of this Assembly to support this excellent motion. Thank you. MR. MUSGREAVE: Mr. Speaker, I'd like to say a few words about this motion from the hon. Member for Red Deer.

Unfortunately, I can't begin to speak in such learned terms as he can on this whole issue of pensions, but I would like to take issue on some things. Perhaps I didn't understand his debate, but I think it would be most unfair that new public service employees should have to pick up what seems to be a looming debt. In my opinion, they should pick up some of it, but I suggest that the bulk of the people paying pensions should also pick up their fair share of what is, in the mind of the hon. member, a debt that we can't handle.

The past attitude of governments has been that these pension plans were not funded for the simple reason that governments would always have the ability to tax, and governments would always remain as governments, and the pension obligations would always be met. If he's really concerned about the increased growth of the deficit, let's increase all the premiums. Another part of the motion which I have some concern with is "reassure pensioners". As one who gets a pension, I don't have any problems with being reassured about my pension. I have been here 10 years now.

I have not received a single letter or one complaint from any of my constituents, and I represent one of the 10 largest constituencies in the province with over 29,000 voters; not one of them has complained that he's concerned that his pension is going to be in trouble. I have had one complaint, one written letter, from a senior official who retired from the city of Calgary, which is under the Alberta pension plan. He was complaining that in his opinion the last increase by Executive Council wasn't large enough. He mentions protection for future Alberta taxpayers. I must confess, Mr.

Speaker, that I get a little concerned when I hear young people like the hon. Member for Red Deer advancing such gloom and doom concerns of people from the private sector. I can appreciate where he comes from. He comes from balanced plans, and I appreciate that.

But when you take the United States, which is spending billions of dollars on defence, when we've got a budget deficit running between $25 billion and $30 billion a year in Canada, where our debt is more than that of the United States, can he in all honesty say that any member of Parliament or any Legislature in this country is going to say to the pensioners, "Tough luck, we've run out of money"? I doubt it. We saw how quickly our Prime Minister cut the ground out from under Mr. Michael Wilson when he said that we have to look at universal programs such as family allowance and old age pensions. Mr.

Wilson was left out in left field all by himself on that one. I suggest that if the debt is a concern, perhaps they should start charging higher interest rates. I understand that right now the Canada pension moneys are loaned to the provinces at ridiculously low rates of interest, somewhere in the range of 3 and 4 percent. Why don't they loan this money out at higher rates? Secondly, he mentioned the concern that the Premier of Saskatchewan had with the pension plans in New York City. I think we could also include the city of Montreal, which is using the police fund pensions, I believe, to meet current expenses.

A lot of people like to use New York as an example of mismanagement of moneys. What they don't appreciate is that New York City is still a jumping-off place in America for new Americans such as Hispanics, Puerto Ricans, or black people from agricultural areas. They have to pick up the majority of the burden of social assistance,

whereas in Canada this is primarily picked up by the federal, provincial, and city governments. Obviously, if you have concerns to look after people, you have to feed them, and you have a pot of money there, you're going to use it. I think it's only proper that they should. The other point I would like to make on this issue, Mr. Speaker, is that in those cities that I mentioned, regrettably unions have managed to get very good pensions compared to the private sector. For example, we know our pension is 4 percent per year.

When I was at Imperial Oil Resources, it was 1.6 percent per year, less than a third of what ours is. So you can see that the private-sector funds are in better shape because they reflect the economics of the situation. Today in this country of ours if you arrive at the age of 65 with no money at all and you're married and your wife is 65, you can obtain almost $1,000 a month. In my opinion, that is a fair amount of money when you figure that they have contributed absolutely nothing to it.

Many people who are in that position today worked in companies that had no pension plans, had no ability to put money aside for their old age, or made so little that they needed whatever they could get to keep body and soul together. In conclusion, Mr. Speaker, I think a society such as ours moves ahead with liabilities, and this happens to be one of the liabilities. It also moves ahead with lots of advantages.

When I look around at the education enjoyed by the younger members of this Assembly — they have more money and better communication abilities — frankly, I don't think underfunding of the pension plan is one of our major concerns. MR. GOGO: Mr. Speaker, I welcome the opportunity to participate in Motion 215. As with many motions and Bills brought forward by the hon. Member for Red Deer, it's not only unique and interesting but seems to present a challenge to the House and the members.

He's been attempt­ ing in a very real way to remake the health care system of this province, based on some very accurate actuarial methods. Unfortunately, the real world may not exist in here, and he tends to exist in the real world. Many times he's shown us opportunities whereby we as legislators dealing with taxpayers' money probably should apply some common sense. Sometimes members heed and other times they don't.

But in the final analysis, I'm sure he has to agree that when you recognize where Alberta is in the Canadian scene, with only 10 percent of its people, with the assets we have — albeit the good Lord may have put them there; they're simply managed by the present government — one has to concede that the system we presently have is really not all that bad. Mr. Speaker, there's no question that the whole topic of pensions seems to increase in people's minds in a linear fashion based on their age. In other words, chronologically they become more important.

When a member or citizen reaches age 50, he then starts to think in those terms based on what benefits he might get. Obviously, it's of very great importance to many Albertans. Just a moment ago the Member for Calgary McKnight mentioned the system we have in place in the nation. Of

May 9, 1985 ALBERTA HANSARD 901 our 10 million or 11 million working Canadians, roughly one-third are organized in the sense that if they don't belong to unions, they certainly belong to associations which are quasi-unions, such as teachers, doctors, dentists, lawyers, et cetera. A great number don't have pensions of any kind but are expected to pick up the tab for many of those who do. As members are well aware, we have in place the Canada Pension Plan, which is a plan to look after those who did not look after themselves. That was the whole concept back in the '60s, some 20 years ago.

We have the old age pension program for those who are fortunate or unfortunate enough — depending on your point of view of the way the country is going — to be alive to 65 to receive it. If they have a pension plan of other sorts, they can of course have that melded into, interwoven, or adopted to another pension plan so that when they reach that magical age of 65, they will not receive the extra benefit of that. In addition, they receive the guaranteed income supplement, which in many cases is equal to the old age pension. Within this province we have the Alberta assured income program.

Those who receive the old age pension and the guaranteed supplement get the assured income plan. For those who cannot work because of a disability, there is the AISH program. The latest one, of course, is the widow or widower pension program. So it seems the state has gone a long way in looking after members of society at some very great expense. When we're talking about the people that I think the Member for Red Deer is talking about, we're really not talking about any of those.

We're talking about the primary people who come under the six-plus pension programs in the province of Alberta; that is, the public service pension plan, the public service management pension program, the MLA pension program, the local authorities pension plan, the universities academic pension program, the special forces pension plan, which of course primarily deals with police and perhaps fireman, and the Teachers' Retirement Fund, guaranteed by this province but not administered by the Provincial Treasurer.

The question being put to the members is that perhaps we should "consider establishing a fixed contribution pension plan for new public service employees." I think we should just take a minute, Mr. Speaker, and review the concept of pensions, why they exist. Old age pensions started in Germany before the turn of the century. They continued to pay their pensions even through its great wars. Obviously, pensions are an important element to a lot of people. Traditionally, the public service in Canada had two things that other people didn't have, and this survived depressions.

One was tenure or job security and the other was pension. So they've had these almost forever. They had them on a certain formula. Frankly, many of them didn't require contributions by the individual until the last 30 or 40 years. So pensions are ingrained in people's minds as being extremely important. If we're going to start tinkering or fooling around, we had better be well aware of what the consequences are.

I guess the first point is that we should concede that the Alberta government obviously recognized this through the Auditor General, when some three or four years ago the Provincial Treasurer found that extra $1.1 billion the Member for Red Deer referred to — that's since grown to some $2.1 billion or $2.2 billion — in an effort to look after these unfunded liabilities. Mr. Speaker, major steps have been taken. Since then the increase in contri­ butions, which was an option available to the government, was undertaken.

I don't know what the projections are over the five-year term, but presumably with the recommendation of the Provincial Treasurer, they will go a long way toward assisting the unfunded liability. I don't think there's any issue taken on those points when one considers the benefit side. The Member for Red Deer accurately points out that the benefit is quite frankly unknown. You don't really know because you can't project what the salaries will be at a given time. One can take an example of somebody who commenced as a public service employee in, for the sake of argument, 1950; it is now 35 years later.

That person would have contributed at that given rate of between 3 and 5 percent over all those years and accumulated X dollars. If he retires today, he receives, as I understand the formula, 2 percent for each year of service of the highest three or five years. Mr. Speaker, in many cases one could make the argument that in one to two years he could withdraw every penny he put in, and he would then draw that for the rest of his natural life depending on the type of annuity he had chosen; i.e. whether it was single life, spousal, survivor benefit, et cetera.

So the Member for Red Deer makes a very excellent case, because the money purchase program, in its very simple context, is: you put in X percentage of what you earn — generally it's fixed — and it grows at whatever the interest rate is. Hopefully it's realistic and not 4 percent, which the public service now pays. Anybody else trying to do that would be on the front page of the Journal. That's the opposite of Sears charging 28.8 percent on consumer debt. However, so be it. I'm sure there's a reason, and future speakers in this debate may well point that out, but it is 4 percent.

I think it's based on certain federal legislation that you can only guarantee a given amount under pension legislation nationally. Mr. Chairman, there's always that tendency to look at the private sector and say: that's the engine of growth; that's what pays the bills; that's where people take their chances. I really don't see the kind of bonuses going to the public sector that go to the private sector.

I don't see, for example, the case that existed in 1980-81 when engi­ neering graduates from the University of Calgary had a choice of a Corvette or $20,000 or two years' payment on their apartments if they would only join a certain company. Now they can't find a job, but that's a different story. I don't know of any civil servant who got that, or if he did, I'm sure it's not public. So the private sector, it seems to me, has ample opportunity to do things the public sector doesn't. One has to be extremely careful when you start fooling around with an established principle.

To quote Saskatchewan — 75 percent of us come from there; it's not a bad idea to sometimes quote Saskatchewan. I frankly don't think one can hold that up as a shining example, particularly as there's no track record yet in the province of Saskatchewan with regard to their new method of contributions. It was only discovered a few years ago that they didn't have contingent liabilities other than the liability of the taxpayer of Saskatchewan to meet future liabilities. With that in mind, Mr. Chairman, I'm torn between supporting or rejecting the motion of the Member for Red Deer.

I have great respect for his knowledge, ability, and the thought he puts into motions like this. The only fear I have is his age: he's not as aged as some members of this House and therefore hasn't had the bruises other mem­ bers of this House have experienced or faced the real world in terms of reality in this Assembly. So with those comments

902 ALBERTA HANSARD May 9, 1985 I want to close by commending the Member for Red Deer for stimulating debate as to what we should be considering but at the same time would urge some degree of caution. If we move, let's be extremely cautious that we know what we're doing before we move. Thank you very much. MR. R. MOORE: Mr. Speaker, it's a pleasure to rise and speak to this motion, which I support very strongly. It's long overdue and is very pressing at this time.

Motion 215 urges the Alberta government to adopt "a fixed contribution pension plan for new public service employees." When you consider that the Auditor General estimated Alberta's public pension unfunded liability to be $4.1 billion as of March 1984, it's cause for concern. I think the hon. Member for Lethbridge West should consider fiddling around with it when it has that kind of liability sticking out. Somebody should be fiddling around with it, because it needs correcting. When I say unfunded liability, I mean assets minus obligations.

It's seriously underfunded, and it should be of prime concern to us and to every Albertan. Let's compare what we're talking about when we say private sector/public sector pension funds. The private sector must cover all its pension costs. They must be fully funded and self-sustaining, Mr. Speaker. The public-sector pensions are not up to date and rely on government taxation powers. Motion 215 proposes that we draw the line now and eliminate future growth of our unfunded liability. We would continue to recognize commitments made to existing public service contributors.

We don't want to alarm the existing partici­ pants. We're saying: for new members coming on. I believe some action must be taken, and it must be taken now. In 1984 the Alberta government increased the employee and employer contributions by 1.25 percent on a phased- in process. That's for the public service and the local authorities pension plans. However, even with that increase our unfunded liability is growing. Why should public-sector plans be treated so vastly different from private-sector plans, Mr. Speaker? We are currently stressing fiscal responsibility in departmental spending.

Why not put some fiscal respon­ sibility in the area of public-sector pensions too. Mr. Speaker, Motion 215 asks us to view public service pensions in a new light. It asks us to implement a plan where contributions are fixed at some percentage of salary, and the benefit varies according to the amount contributed and investment returns on contributions. In effect, public service contributors would be asked to participate in an annuity fund, in simpler terms. Where the ultimate growth rates of a managed fund are unknown, the ultimate con­ tributions are controlled by the employee. That's the impor­ tant fact.

The employee would accumulate funds as he changed jobs. Vesting the benefits would be automatic. A contributor would not be subsidizing someone else's benefits or be saddled with someone else's liabilities. Saskatchewan adopted a defined contribution plan in 1977, and that has stopped the growth of unfunded liabilities in that province. We've seen it work. We know it will work. Why not here in Alberta? We may be a rich province, but we cannot tolerate or allow this unfunded liability to grow and be paid by future generations, or whatever through taxation, anyway, in the final analysis. Mr.

Speaker, the reality of the day is that workers are on the move; they're mobile. The population is aging. Something must be done to halt the growth of unfunded liability to accommodate mobile workers. This is a fact of life. Our workers now are not like they were in years past. They're mobile; they move, and their pension plans can move with them. Motion 215 recognizes this need. It urges us to adopt a plan to control liabilities, introduce individual fiscal responsibility, and increase vesting and portability of pension funds. Mr. Speaker, now is the time we should address this and take positive action. Mr.

Speaker, I move adjournment of the debate. head: PUBLIC BILLS AND ORDERS OTHER THAN GOVERNMENT BILLS AND ORDERS (Second Reading) Bill 211 Alberta Economic Council Act MR. MARTIN: Mr. Speaker, I'd like to make a few remarks in introduction of Bill 211, the Alberta Economic Council Act. A Bill dealing with the Alberta development fund was brought in previously and I saw overwhelming enthusiasm for it from government members, so we will proceed with Bill 211.

Before I get into the Bill, the whole basis of it is to suggest that we need a mechanism or vehicle in this province to make sure that our economy is going to be diversified and that there are going to be opportunities and jobs in the future. It seems to me, especially during the '70s when we happened to have a resource that was needed throughout the world, that recognition that this might not go on forever was just not prevalent in the province, not only with the government but, of course, with many Albertans. We know what we're facing right now: a sort of windfall and then a boom type of economy.

I think all of us in this Legislature recognize that it's all right if you can stay with the windfall. That creates certain problems. With all the windfall, the boom and the bust, the recession becomes much more difficult, and of course that's what we faced basically starting in 1981. We have said, and I think the government recognized it somewhat in their white paper, that we're going to have to do things differently in the future, because we cannot inevitably go into the boom-and-bust psychology, Mr. Speaker. In our white paper we suggested methods different from the government's.

It seems we have a disagreement, a different idea of what diversification is. The Premier and I had this discussion the other night in the estimates of his department. It seems to us, and I've said this before, that in the white paper we backed off even from what the heritage trust fund was originally set up to do. It seems to me that we're more reliant on one industry, oil and gas, than we have been in the past, and the figures and evidence back this up. We pointed out, and I won't bore members here, that other industries have fallen in terms of their relative value to our economy.

Industries like manufacturing and agriculture have certainly fallen since the '60s in terms of their output in the gross domestic product. We think we have that potential. It would be all right if OPEC were to suddenly get their act together, if we can put it that way, and drive up the price of oil. Then for the time being we would probably not be in bad shape in this province. Admittedly, the minister of energy recognizes this. However, it is a guess by all

May 9, 1985 ALBERTA HANSARD 903 people and the evidence indicates that it may be going in the other direction. [Mr. Speaker in the Chair] The point we make is that for long-term, stable growth we believe we need a plan. That's why we talked about our Alberta development fund. We believe we ought to know where we're going, not do it by ad hockery. If we rely totally on oil and gas and put all our eggs in the one basket, if things go well, that works out well. When things go down, there is a crush.

It seems to me that the government did not have a plan all during the '70s, and they thought things would go on as they started to when OPEC raised the price. We went on that assumption for many, many years. Of course, everybody thought this was going to go on forever. There were a number of reasons why it didn't. I know the members will talk about the national energy program; it certainly had an effect. The breaking up of the cartel had an effect. There were a number of reasons, but the fact remains that we fell then, and fell badly. Mr.

Speaker, as this money rolled in during the '70s, if we had had some idea of how we could best diversify the economy, how we could best bring out industries that would be viable without massive government subsidies, if we were following a plan — going back to what the Premier said, that we had a decade — I suggest that we'd be in better shape right now. The encouraging point about it is that I believe there is still time to work toward a diversified economy. I compliment the government in this one regard.

As I recall, back in the early '70s when people talked about economic planning, a minister of the Crown said in Fort McMurray: "That's not the way we do business here. We don't plan; that's not the Alberta way." But at least the government is now recognizing with their white paper . . . MR. SZWENDER: Who said that? MR. MARTIN: Mr. Getty said that in Fort McMurray. The government has now recognized that there is a need for a plan. While I may not agree with their total analysis, the fact is that they have brought out an economic plan looking at the next five years. So I'd say that realization is here.

Now, in my ever-helpful way, Mr. Speaker, I'm trying to make that plan even more effective. I've said before that it's all right for us to have ideas and debate ideas in the Legislature; that's what we're here to do. But I suggest there are many, many ideas that we miss because we're not looking at it in the proper way. That's why we see the need for a Bill similar to Bill 211, the Alberta Economic Council Act. It seems to me that there should be some planning besides what the government is doing — an agency that's arm's length from the government to advise the government.

I'm well aware that the government has to make the decisions; that's what they are elected to do. But it seems to me that one of the important things in making wise decisions is to have as much input and feed-in from outside the Legislature as possible, to set up an agency that will advise the government. Mr. Speaker, what I propose is not a radical approach. Something simple like this is fairly common in most industrial countries. Even Conservative governments in other provinces have

an Act similar to this. It's a way to help the government plan; it's that simple. There's no perfection out there in the world, but I would suggest to you, Mr. Speaker, that the governments that seem to be handling tough times the best are the ones that have very comprehensive planning mechanisms involved with them. I use Japan for an example. But we are different. We have to devise our own strategy. I for one, and I think all other members here, don't know precisely what industries would be viable over the long haul; we've never put the study into it.

In this province we have a fairly young population, and if we're going to deal with the problems of unemployment and the problems of boom and bust, as I mentioned, it seems to me we're going to have to look at new approaches. I don't think we should be hesitant. I don't think we should be defensive about it. Let's call for help wherever we can to advise us. Mr. Speaker, I'm not suggesting that this group we're suggesting take over for the government. They're arm's length from government to advise the government. If the government doesn't like what they're advising, they have every right to reject it.

Hopefully, some of the things they would come up with would have some merit and would give us some direction as we go through the '80s and into the '90s. We believe not only that such an economic plan is absolutely essential but that, as I said, the task is just too important to be left solely in the hands of the government of the day. We believe the broadest possible participation by the Alberta public is essential to the success of an economic plan designed to benefit all Albertans.

It was for this reason that we proposed the establishment of an economic council of Alberta, comprised of a mem­ bership nominated by representative organizations from every sector of the Alberta economy, such as organized business, organized labour, women's groups, native groups, co-oper­ atives, the small business sector, and any other component part of the economy. We're saying that to deal with these problems, we're all going to have to work together. Because the council would be doing important work, we believe it should be provided with a secretariat to enable it to carry out its responsibilities. Mr.

Speaker, to go into the highlights of the Bill itself, the major provisions are basically the following. We are suggesting a 30-member economic council appointed by cabinet. I think that's an important point to make. We think the cabinet should have the authority to eventually okay this, because if they're going to work with government, of course, the government has to have some faith in their abilities. But it should be on the basis of recommendations advanced by the major sectoral groups in the province that I've been talking about: business, agriculture, small business, labour, whatever.

The other highlights in Bill 211: It shall be the duty of the Council to advise and recommend to the Minister strategies and policies by which Alberta can achieve the highest possible levels of employment and efficient production to bring about a high and consistent rate of economic growth by which all Albertans may share in rising living standards. Other duties of the council, Mr. Speaker: It shall be the duty of the Council to prepare an annual evaluation of the Alberta Development Fund. Or if we want to call it the heritage fund, that's quite all right.

But this group should be taking a look at that, because it seems to us that it's still our main vehicle, if you like, for the future. Mr. Speaker, the other major provision of the Bill that I'd like to bring up is that the day-to-day operations of the

904 ALBERTA HANSARD May 9, 1985 council would be administered by a secretariat composed of three to five senior officers. The other areas the council may go into — of course, it would be up to Executive Council, but we suggest some other areas besides those main ones — are in

section 7: The Council may, (

a) conduct social or economic studies in any area considered by the Council to be of concern. We think that's an important area for them to get into. They should (

b) cause to be published such studies and reports as are prepared by or for the Council; (

c) co-operate and maintain liaison with the Economic Council of Canada and bodies in other jurisdictions corresponding to the Council across the country. If necessary, Mr. Speaker, we think they should also (

d) conduct public hearings into any matter or subject as it may deem necessary for the proper discharge of its duties under this

section or under

section 6. They could also (

e) conduct seminars and conferences for the purpose of creating an awareness and public understanding of provincial social and economic issues. How many times have we heard government members and cabinet ministers saying that people do not understand the trust fund, where it's coming from, or what its purpose is? It could certainly be in the mandate to conduct these sorts of seminars. It could also (

f) create such committees as it considers desirable for the proper discharging of its duties; and on special occasions (

g) undertake such other duties as are assigned to it by the Lieutenant Governor in Council. Mr. Speaker, in conclusion, I hope hon. members take a look at some type of planning mechanism. I know planning has been a bad word in the past. I really suggest to members that if we don't know where we're going, if we do not have an economic plan, it's always going to be ad hockery. It's going to be hit and miss and boom and bust. I suggest to hon. members that private companies are always analyzing and always have an economic plan for the next five or 10 years.

If private companies do not do that, they probably won't be around, because circumstances change. What we're saying is that the government should have a plan, but they should be getting the best possible advice they can. That's why we're suggesting components from all the component parts of the economy plus the best minds we can get in that secretariat. Mr. Speaker, we think this Bill has a great deal of merit.

If government members have other suggestions to help in the planning mechanism, if they think there's a better way to help plan the future of this province, the economy of this province, I for one am certainly quite prepared to take a look at them. We're looking at one mechanism we believe could have some influence in helping government make the important decisions they're going to have to make in the next few years and helping them make good decisions. For that reason, Mr.

Speaker, I would conclude by saying that rather than calling us socialists and every other thing — because Conservative governments have brought these sorts of things in — rather than going to that level, we debate the merits of the Bill. If there are good alter­ natives, I for one want to take a look at them. Thank you, Mr. Speaker. MR. PURDY: Mr. Speaker, in rising to make a few comments on Bill 211, first of all, I'd like to say that I've studied the Bill and some of the proposals put forth by the Leader of the Opposition, and I'm not too enthusiastic about it.

I also listened very carefully to the debate in the Assembly last week on the Alberta development fund, and I didn't see any overflowing support from members on the government side of this Assembly for that particular piece of legislation, which the Leader of the Opposition says is supposed to be a companion Bill to the Bill he is proposing today. MR. WEISS: Tell us why you don't like it. MR. PURDY: I'll lead into that. The member indicates that the Bill is supposed to support the economics of Alberta in the future.

In his opening comments he talked about the doom and gloom we have in the province, the boom-or-bust theory we went through in the 1980s. I think most hon. members of the Assembly will agree with me that it had a lot to do with the national energy policy that was invoked upon us. It wasn't very well accepted here and didn't help this particular province. I would also remind the hon. member and members of the Assembly that the private sector in Alberta is taking the lead in a number of initiatives to get the economy going again.

I recall from the event we were at last night with Nova, an Alberta Corporation, the very sincere feeling of the board of directors and the people from Nova. They have real encouragement, and they don't go out with a doom-and-gloom outlook of the economy of Alberta as some other people do. When they showed us their economic outlook, what is taking place and being done by the private sector, it was very exciting. These particular directors and the president, Mr. Blair, are very excited about the endea­ vours they're going to be taking and which way they're going as an Alberta corporation.

I may add that a number of other Alberta corporations are out there doing the same thing. So I don't look at the doom and gloom of what's happening in Alberta right now at all. I think the economy is moving, and because of the free-enterprise system we have in the province, it's going to move ahead as we anticipate. Mr. Speaker, I look at the Bill itself. As I said earlier, I've looked at some of the sections of it. The hon. Leader of the Opposition, the sponsor of the Bill, indicates that we should have a 30-member council.

But at various times he looks at the front bench over there and says a 30- member cabinet is too large. So I wish the member would get his facts straight and his thoughts in the right perspective. The 30-member cabinet has particular responsibilities for various areas of the economy, and I think they would be a lot more efficient than any 30-member council that would have the number of duties the member would like them to have. Of the various duties of the council that he sets forth in his Bill, most are now being done by the government and private industry.

He talks about "strengthening and improving Alberta's extra-provincial financial trade position." I think that's being done very adequately now through various government departments — Economic Development and the Provincial Treasurer, to name only two. I have a real concern with the particular part of the Bill that says "decreasing foreign participation in ownership, control and management of economic enterprises in Alberta."

May 9, 1985 ALBERTA HANSARD 905 I ask you the question, Mr. Speaker: where would we be in Alberta today if we hadn't had foreign investment in this province a number of years ago? The new federal government has now made the commitment to get rid of the Foreign Investment Review Agency, which has been a detriment to investment in the province of Alberta and the Dominion of Canada for some time. When opposition mem­ bers in this Assembly start talking about decreasing foreign ownership in Alberta, I think that's a very retrograde step. It would be a step back in history.

If you want to see doom and gloom and recessions, don't let the foreign ownership people in here. Then you're going to have real problems. A lot of the oil development and other things happened in Alberta in the '40s and '50s because of the direct involvement of dollars other than our own. I know what the syndrome is anyway; it's that the hon. member doesn't like the multinationals that he talked about a number of times in the Assembly. But the multi­ nationals play a role in this particular province and in Canada. They also have a

section in the Bill which deals with further duties of the council. It says: conduct social or economic studies in any area con­ sidered by the Council to be of concern. We as a government set up an agency in the province a while ago called the Environment Council of Alberta. That's a group that goes out and conducts its hearings and does a number of other things. Sure, some of the reports are positive, but at times they go out on witch-hunts looking for things that can stir up — it's the best word I can think of right now — various groups. It just doesn't work.

The second one: cause to be published such studies and reports as are prepared by or for the Council. I can see a 30-member council working here in Alberta, and Nova or some other corporation comes to them and says, "This is what our plans are." In this particular clause of the Bill, the hon. member's indication is that that information should be public. Well, you've got to have the confidence of those private-sector companies that they'll keep those reports and stuff confidential.

We've had a number of debates in this Legislature during motions for returns when the government has turned down requests for information of a confidential nature. I certainly do not support that way. The other one is: create such committees as it considers desirable for the proper discharging of its duties. I can just see a real number of other committees being created. You think we've got a bureaucracy now. If we put something like this in place, we'd have a real bureauc­ racy. I'd like to look at some of the things this government has done in the last number of years to diversify the economy in Alberta.

We just went through the debate on the estimates of the Premier and the Department of Economic Development, and a number of questions were asked then. The Premier and the ministers of Economic Development and International Trade answered those questions on div­ ersification and what we're doing. We did two very exciting things in 1983: one was Vencap, which has worked quite well; the other one was the small business equity corporation, which is really exciting right now. It was proclaimed in this Legislature in 1984, and it's going to work very well in its particular field.

I now look at the white paper Proposals for an Industrial and Science Strategy for Albertans 1985 to 1990. If hon. members will refer to page 8 of this particular report, you'll see that the white paper includes 24 very positive factors that this government has done from 1971 to 1984. It's kind of exciting when you look at a lot of what has taken place. We said that in 1971 there were only 643,000 employed in Alberta. In May 1984, despite the unemployment situation, we had 1,111,000 people employed. That was about a 72 percent increase in 14 years.

I think we've also diversified a lot in the agricultural industry. When I first came into the Assembly 14 years ago, there was little or no secondary processing of agri­ cultural products. A number of secondary processing plants have been established in various parts of Alberta, and again it has been done with the encouragement of the provincial government but mainly by the private sector getting out there and bringing them in. I recall that at one time potato chips were brought in from eastern Canada; now they're being done here.

So many exciting things have been done in the agricultural industry because of diversification of the economy and also our decentralization of various agencies out of the cities of Edmonton and Calgary. Another one I think is very exciting is the Oil Sands Technology and Research Authority, which is doing a lot of work and has really gone out to assist the private sector in developing the potential for new oil sands mining and in situ projects, heavy oil deposits, and enhanced oil recov­ ery. This particular group has a budget, and they are working with private industry.

They are out there helping in div­ ersification, and they certainly don't need an economic council to assist in that particular regard. The Alberta Energy Company is another exciting one that happened here in Alberta. It has assets of over $1 billion right now. It has participated in a number of very large Alberta projects — another way the economy was diversified. I only have to look further at the white paper, Mr. Chairman, and there are pages and pages of major and selected Alberta economic incentives that have taken place from '71 to '84.

The first two that come to mind, because I was a member here 14 years ago, are the Agricultural Development Corporation and the Alberta Opportunity Com­ pany. Some members say these haven't helped to diversify the economy. Well, they certainly have. The Agricultural Development Corporation has helped to strengthen Alberta's base industry by supporting the agricultural industry. The Alberta Opportunity Company has the same effect, helping to encourage decentralization by emphasizing loans outside the cities of Edmonton and Calgary.

Since 1972 the Alberta Opportunity Company has made over 3,000 loans for a total of about $355 million. That has certainly been exciting. Another area we looked at in 1972 was the marketing of Alberta products and resources through the International Trade missions and research. The person who is likely absent from this Assembly more than anybody else, the Member for Edmonton Avonmore, is out in the world looking for markets . . . AN. HON. MEMBER: I thought it was Walt Buck. MR. PURDY: No. He has done an excellent job.

Members have only to look at a number of exciting things that have taken place under the portfolio of the Minister of International Trade. I recall to members the April 15, 1985, debate in Hansard,

906 ALBERTA HANSARD May 9, 1985 where the hon. minister pointed out the number of exciting things that have taken place to diversify Alberta's economy by having various companies sell oil equipment, other resource equipment, and manufacturing equipment to people not only in Canada but outside. We look at an exciting thing that's happening right now. Nova, an Alberta Corporation has a 600-kilometre pipeline to build in China for carrying energy. The Dreco company in Calgary has a contract to sell drilling rigs to China. The list goes on and on, Mr. Speaker.

Our trade to India has increased 187 percent over the last year. The value of our products that are now being shipped to India is something in the neighbourhood of $54 million. Our trade to Indonesia has increased by 73 percent. We're into the Latin American markets and a number of other areas. As I indicated earlier, in 1973 we established the Alberta Energy Company. It has had an annual growth of 33 percent, so that has to be adding to the economy in various areas. Looking at the farm communities, a lot of money has been put into the major renewal and expansion of irrigation for very good reason.

An estimated total of over $2 million has been spent into 1984. One very exciting thing that was done in 1975 and carried out in 1976 was an election promise by the Con­ servative government of the day that we would establish the Alberta Heritage Savings Trust Fund. That was carried out. We had the mandate for that, and we did that. The Alberta Heritage Savings Trust Fund, under its various divisions, is very diversified.

Through the capital projects division a lot of money, a total of over $2.135 billion, was expended in '84; in the Canada investment division, $1.896 billion; and in the Alberta investment division, $8.079 million. A lot of these have taken place. Mr. Speaker, the list goes on and on. I think all members of the Assembly are fairly familiar with the proposals under the white paper. I would like to conclude now by saying that as far as I'm concerned, and I think most members of this Assembly will support me, Bill 211 is not required in this Assembly.

I don't think it has worked that well in other jurisdictions where the Bill has been in place. I don't think it's going to fill any void in the marketing or strategies or whatever word I want to use within the economic diversification of the government of Alberta in the various fields it's involved in. I still strongly say, Mr. Speaker, that we have the private sector out there, and it's the private sector that's got to, and they will, lead the economy of Alberta back to a very, very strong recovery. So at this particular time an Alberta economic council is not needed to diversify any economy.

It's not going to help us in any way. MR. KOWALSKI: Mr. Speaker, the debate this afternoon is on Bill 211, the Alberta Economic Council Act, presented and put forward by the hon. Leader of the Opposition. I spent some time the last number of days reading this Bill, listened very attentively this afternoon to the opening debate from the Member for Edmonton Norwood, and heard also the participation of my colleague from Stony Plain. I recall being here the other day when we had a very stimulating debate with respect to Bill 206, the Alberta development Act.

I remember listening to the passion that was brought forward by the Member for Lacombe with respect to the whole concept before us. I want to say at the outset that this is really a very interesting Bill. It allows one to look at several "whereases", then to look at an administrative mechanism, then to look at a series of duties, and then to put question marks beside a lot of the clauses. First of all, I would like to raise a number of concerns with respect to the specifics of the Bill.

I'm glad the Member for Edmonton Norwood is here, because I hope that when we come to the adjourning part of the debate, he will be in a position to provide us with further information on what some of these clauses really mean. I want to congratulate him as well for taking the initiative of putting all this together and having it presented here in the Legislature so that we all have an opportunity to look at it and raise a few questions and perhaps better understand what the meaning is all about.

I particularly would like an explanation — I would ask the member to even make a note of this so that when he has an opportunity to come back later, he might be able to tell us what this is all about. At the beginning of Bill 211, there is a clause:

WHEREAS the process of determining the most effi­ cient and effective means of pursuing such husbanding and management can be best undertaken in a spirit of dispassionate and impartial inquiry and reflection based on the accumulated experience and wisdom of the people of Alberta. I'm not sure exactly what all that means. But I come to the conclusion that what it really means is that you should have somebody from outside government who would bas­ ically look at the economy of Alberta, and because they would be from outside government, they would be dispas­ sionate and impartial.

They would then reflect on everything because of their accumulated experience and wisdom. All of this somehow would roll in from this 30-person Alberta economic council. I have to assume, Mr. Speaker, that the basic purpose for all that is that essentially the member has some concern about Members of the Legislative Assembly fulfilling their duties in looking at the economy of Alberta, reflecting upon it, looking at what happened in the past, and then projecting 10, 20, 30, or 40 years ahead.

I've always believed that in a democracy such as the one we have in our province, the people who have in fact been asked by the vast number of people to represent them are those who are elected. It's the ultimate closeness to the people, the ultimate being in touch with the people. This is where my little dilemma comes in. Time and time again I've heard the Member for Edmonton Norwood basically criticize Executive Council or the Lieutenant Governor in Council for being in too much of a dominant position in terms of being involved in some of these boards, agencies, and commissions. Flip over to page 2, and in

section 3(2) it says: The members of the Council shall be appointed by the Lieutenant Governor in Council. I've heard the arguments put forward by the Member for Edmonton Norwood recently with respect to another council or board. Basically, he said that the Lieutenant Governor in Council would never be in a dispassionate and impartial position when it looked at something like the Council on Alberta Teaching Standards and that it would not be appro­ priate that Executive Council, in fact, appoint them.