1989 Legislative Session: 3rd Session, 34th Parliament

HANSARD

The following electronic version is for informational

purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JULY 19, 1989

Afternoon Sitting

[ Page

8723 ]

CONTENTS

Routine Proceedings

Forestry Value Added Act (Bill M232). Mr. Harcourt

Introduction and first reading –– 8724

Forestry Research and Development Act (Bill M233). Mr. Harcourt

Introduction and first reading –– 8724

An Act to Reduce Poverty in Old Age (Bill M234). Mr. Rose

Introduction and first reading –– 8725

Rights of Children in Care Act 1989 (Bill M235). Ms. Smallwood

Introduction and first reading –– 8725

Tabling Documents –– 8725

Oral Questions

Knight Street Pub investigation. Mr. Sihota –– 8725

Principal Trust inquiry. Mr. Clark –– 8726

Tabling Documents –– 8727

Committee of Supply: Ministry of Social Services and Housing estimates.

(Hon. Mr. Richmond)

On vote 64: minister's office –– 8727

Ms. Smallwood

Mr. Williams

Ms. Marzari

Vancouver Island Natural Gas Pipeline Act (Bill 55). Second reading

Ms. Edwards –– 8735

Mr. Clark –– 8739

Hon. Mr. Davis –– 8740

Committee of Supply: Ministry of Social Services and Housing estimates.

(Hon. Mr. Richmond)

On vote 64: minister's office –– 8742

Ms. Smallwood

Mrs. Gran

Ms. Marzari

Mr. Mowat

Mr. Sihota

Vancouver Island Natural Gas Pipeline Act (Bill 55). Committee stage.

(Hon. Mr. Davis) –– 8760

Ms. Edwards

Third reading

Milk Industry Amendment Act, 1989 (Bill 45). Committee stage.

(Hon. Mr. Savage) –– 8765

Mr. Barlee

Mr. De Jong

Third reading

Food Choice and Disclosure Act (Bill 85). Committee stage.

(Hon. Mr. Savage) –– 8765

Mr. Barlee

Mr. De Jong

Third reading

Science Council Act (Bill 72). Committee stage. (Hon. S. Hagen) ––

Mr. Lovick,

Mr. Clark

Third reading

Trinity Western University Foundation Act (Bill 89). Second reading

Hon. S. Hagen –– 8770

Mr. Perry –– 8770

Mr. Peterson –– 8771

Hon. S. Hagen –– 8771

Trinity Western University Foundation Act (Bill 89). Committee stage.

(Hon. S. Hagen) –– 8771

Mr. Lovick

Third reading

Municipal Affairs, Recreation and Culture Statutes Amendment Act

(No. 3) 1989 (Bill 75). Second reading

Hon. Mrs. Johnston –– 8771

Mr. Blencoe –– 8772

Hon. Mrs. Johnston –– 8772

Miscellaneous Statutes Amendment Act (No. 1), 1989 (Bill 90). Second reading

Hon. S.D. Smith –– 8773

Mr. Sihota –– 8773

Hon. S.D. Smith –– 8774

Miscellaneous Statutes Amendment Act (No. 2), 1989 (Bill 92). Second reading

Hon. S.D. Smith –– 8774

Mr. Lovick –– 8774

Hon. S.D. Smith –– 8774

Committee of Supply: Ministry of Social Services and Housing estimates.

(Hon. Mr. Richmond)

On vote 64: minister's office –– 8774

Ms. A. Hagen

Mr. Perry

The House met at 2:06 p.m.

HON. MR. RICHMOND: Today I would like the House to join me

and everyone on the government side in wishing Godspeed to three

members of the Sergeant-at-Arms staff who are retiring this week. I

have asked the Sergeant-at-Arms, Dick Nicol, to have them in the House

so that we can wish them a happy retirement.

They are Dick Eldridge, who joined the navy as a boy seaman in July,

1941, at 17 years of age, served in the Armed Forces for 33 years, and

has been a member of the Sergeant-at-Arms staff for 14 years; Joe

Walushka served in the army for 33 years, and has served us in this

House with the Sergeant-at-Arms staff for 12 years; Don Sebastian

served in the army also for 33 years and has served the

Sergeant-at-Arms staff for ten years.

Would the House join me and all the government members — and I know

I speak for both sides of the House — to wish these men a very happy

retirement and thank them for their years of service to their country

and to this House.

MR. ROSE: Thank you for recognizing me. I seldom allow the

government House Leader to speak for me if I can speak for myself. I'm

glad he included me; I wasn't certain whether the applause was for the

retirees or the fact that I stood up early.

I'd like to join the government House Leader in wishing Dick and Joe

and Don well, and also from this side of the House, thank them for

their efforts on our behalf in assisting here. I don't know whether the

three of them have nicknames — like Joe: I understand he calls himself

the Professional Killer; I don't know if that has to do with his army

record or what, but we're certainly going to miss him around here and

his winning personality and sunny disposition.

I wish every one of the three a tremendously interesting retirement,

and I am sorry about the fact that they had to leave when they are

actually younger than I am.

MR. GABELMANN: A long time ago I had the privilege to

represent the North Vancouver-Seymour constituency. While I was the MLA

for that area, I met one of the world's great people, and he's in the

gallery this afternoon. If members have ever ridden the Royal Hudson

over the years they may have met Henry Reimer, the conductor of the

Royal Hudson . Would members please make him welcome.

HON. MR. VANDER ZALM: I see in the Speaker's gallery someone

who in the past I'm sure has put many of us to the test occasionally as

we attempted to respond to public questioning. I hope you'll all join

me in welcoming Gary Bannerman and his wife Patricia.

MS. EDWARDS: It's my pleasure today to ask the House to join me

in welcoming two women from Ontario, Pat Orser from Eliott Lake and her niece

Shelley Martel, who is the MPP for Sudbury East. Shelley shared the experience

with me of winning the 1986 B.C. election in Kootenay, for which I thank her.

She went back to Ontario to become, when elected in 1987 at the age of 24, the

youngest woman elected to a parliamentary assembly in Canada. Please join me

in welcoming them.

HON. MR. REID: Mr. Speaker, my executive assistant Jon Donald

had his birthday yesterday, but that's not the important thing.

Visiting him is his brother from Montreal, Capt. Chris Donald of the

Canadian Forces, who is with us today in the precincts. Would the House

make him welcome, please.

MR. JONES: For the first time in two and a half years of

Wednesday noon-hour basketball games, the youth and tenacity of the

scrum-of-the-earth team representing the press gallery managed to beat

out the experience and skill of the MLA team representing both sides of

this House. I think on this special occasion we should offer our

congratulations to all who participated.

MRS. GRAN: Mr. Speaker, seated in your gallery today are two

people from Langley, Harry and Martha Moes. Harry is the vice-principal

of Langley Christian School. He's also a member of the Langley Social

Credit executive. With them are their six children: Randy, Mark, Renee,

Lucas, James and Nathan. Would the House please make them welcome.

MR. MILLER: It's a contest today. I would like the House to

welcome two grandchildren of a former member of this House — now the MP

for Nanaimo — Mr. Dave Stupich: Shannon and Kenneth Boggis, accompanied

by their father Steve Boggis, who is a former constituent of mine, a

good friend and supporter. My loss is now Nanaimo's gain. I would ask

the House to make them all welcome.

MR. LOENEN: Mr. Speaker, up in your gallery is a very special

person and a constituent: Sylvia Gwozd. She is accompanied by her two

children, Darren and Tracey. Sylvia makes a contribution to our

community in many ways. For one thing, she is a school trustee and has

served our school district for many years. She is also involved

politically in terms of being the president of the Progressive

Conservative riding association in Richmond. During the 1986 election

she helped us greatly in our campaign. On behalf of the Premier and

myself, I would just like to ask the House to please make them welcome.

MR. GUNO: I'd like the House to note that we have two young

visitors in the gallery today. Noah Guno, who is my nine-year-old

nephew, just came back from Ottawa and participating in the opening of

the Museum of Civilization. He was a member of the Nisga'a traditional

dancers. Along with him is his friend, Alano Chapdelaine, who just

turned nine and

[ Page 8724 ]

hopes one day to be a superstar in basketball. Would the House join me in welcoming them.

MR. MOWAT: I am very pleased to introduce to the House today

two outstanding British Columbians who have done a great deal for the

visually impaired citizens of our province: Mary Ann Roscoe, the

executive director of the B.C.-Yukon division of the Canadian National

Institute for the Blind, and Mr. Frank Laird, a past chairman of the

CNIB, a member of the Order of Canada and a former mayor and alderman

of Penticton. I'd ask the House to make them especially welcome on this

day.

MR. BLENCOE: During the lunch break I had the pleasure of

meeting and talking with 25 senior citizens from the James Bay New

Horizons Society Victoria seniors have a fascination for politics in

this House, and I am sure many of them have stayed to watch the

afternoon session. They shared with me some of the issues of concern,

and when we get to the Ministry of Housing portfolio, I will share with

the minister their concerns on housing matters. Would the House please

make them welcome, Mr. Speaker.

[2:15]

MRS. BOONE: In the gallery today are two very good friends of

mine. A friend I haven't seen for many years but who still is a good

friend has moved here from Alberta, made a short pit-stop in Saanich,

and is on her way with her family to Nanaimo. Would the House please

greet Linda and her daughter Kerry Pudwell.

MR. BARLEE: I would like to take the opportunity to welcome

Frank Laird, who is a longtime and honoured citizen of Penticton, and

knows the area and knows the southern interior very well. I would go

along with the House in according him a very warm welcome to the

precincts.

MR. WILLIAMS: I would like to welcome the remaining three people that were not welcomed today.

HON. MR. COUVELIER: There are two other people that weren't

included. Mr. Speaker, this is the day, evidently, for politicians and

political observers to attend our sessions. I'm pleased to introduce to

the House today two constituents: Mr. Paul McKivett and Mr. Victor

Sutherland. Mr. Sutherland and his wife Peggy have recently immigrated

to Canada from Leicester, England, and they'll be making their home in

Victoria. I would point out to the House that these two make odd

bedfellows; Mr. McKivett is a well-known local Liberal, and I can tell

the House that our newly arrived immigrant, Mr. Sutherland, has been

very active in the local council of the Conservative Party in England.

Would the House join me in welcoming both these strangers to our midst.

Introduction of Bills

FORESTRY VALUE ADDED ACT

Mr. Harcourt presented a bill intituled Forestry Value Added Act.

MR. HARCOURT: This bill strengthens requirements for new

value-added production when licence-to-harvest timber licences are

awarded. The new factors which must be included are the ability of the

applicant to create new value-added manufacturing, the ability of the

applicant to manage and use the forest resources on a sustainable

basis, and the ability of the applicant to demonstrate a willingness to

use supplies that are purchased from the region where the licence is

located. These changes will allow the government to choose the

applicant who will be able to harvest and process the timber so as to

provide the greatest possible economic benefit to the region and to the

province as a whole.

In order to ensure that the province receives additional benefits

from replacement of existing licences with a tree-farm licence, all

applicants must guarantee that within a three-year period a higher

value-added product will be produced under the new licence. Also,

TFL-holders not fulfilling their commitment to add value to their

products will be subject to a suspension of their harvesting privileges

and could be subject to the permanent loss of the licence.

Bill M232, introduced, read a first time and ordered to be placed on

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

after today.

FORESTRY RESEARCH AND

DEVELOPMENT ACT

Mr. Harcourt presented a bill intituled Forestry Research and Development Act.

MR. HARCOURT: This act establishes a forestry research and

development agency with a mandate to achieve more value-added

manufacturing in British Columbia's forest industry.

Given the limits of our forests, the creation of new jobs for

British Columbians will depend on obtaining the greatest possible

manufacturing potential from every unit of wood harvested in the

province. Recent studies have shown a potential of $1.7 billion in new

forest revenues and over 4,000 new jobs in British Columbia. However,

our levels of research and development are low, particularly compared

to our competitors. For example, our level of research and development

is only one-third the level of Sweden's.

The agency established in this act would ensure higher levels of

research and development in the areas of new market and product

development; new harvesting, processing and manufacturing technology;

and new environmentally sensitive production technologies.

[ Page 8725 ]

Bill M233 introduced, read a first time and ordered to be placed on

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

after today.

AN ACT TO REDUCE POVERTY IN OLD AGE

Mr. Rose presented a bill intituled

An Act to Reduce Poverty in Old Age.

Interjections.

MR. ROSE: I hope it won't be ruled out of order by you, sir, on the grounds of a conflict of interest.

I know everyone is fascinated to hear what the bill is all about.

British Columbia is the only province in Canada without a pension

benefits standards act to regulate pension plans. While our public

service pensions are generally quite enlightened, at least in some

respects, being indexed to inflation and so forth, too few private or

public pension investment policies are controlled by the workers — as

they should be, if one assumes that pensions are really deferred

earnings. Additionally, the vesting periods of up to ten years are far

too lengthy. Most elderly people are poor and most poor elderly people

are women. They are poor because of low lifetime earnings and receiving

inadequate pension benefits or no benefits at all.

My bill instructs the superannuation commissioner to prescribe terms

to be included or not included in every private plan in which British

Columbians participate.

Bill M234 introduced, read a first time and ordered to be placed on

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

after today.

RIGHTS OF CHILDREN IN CARE ACT 1989

Ms. Smallwood presented a bill intituled Rights of Children in Care Act 1989.

MS. SMALLWOOD: This bill outlines several rights that

children need to have when they are in care: the right to independent

legal counsel, the right to receive instruction pertaining to his or

her cultural heritage, the right to a plan of care from the Ministry of

Social Services, and the right to participate in that plan and to the

services outlined in that plan. It also outlines the right of children

to be informed of the rights in this bill and the right to review the

process available to them in receiving their rights. It also, through

the Ombudsman Act, creates an advocate for children. In addition, it

gives parents, adoptive or foster, the right of access to their

children's files in the Ministry of Social Services and Housing.

Bill M235 introduced, read a first time and ordered to be placed on

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

after today.

Hon. Mr. Michael tabled the 1988-89 annual report of the B.C. Systems Corporation.

Hon. Mrs. Johnston tabled the 1988-89 annual report of B.C. Transit.

Oral Questions

KNIGHT STREET PUB INVESTIGATION

MR. SIHOTA: About a month and a half ago I asked the Premier

some questions about his knowledge of Mr. Toigo, Mr. Giordano and Mr.

Poole and their involvement in the Knight Street Pub affair. The

Premier denied any knowledge at that time. Apart from the one reported

incident of political interference from the Premier's office, could the

Premier advise this House whether there were any further efforts by his

office to ensure that a licence for a beer and wine store was issued to

Ms. McRobbie?

HON. MR. VANDER ZALM: I don't know what the question was, frankly. Will you repeat the question?

MR. SIHOTA: I have a question to the Premier. Apart from the

one incident which has been reported of political interference from

your office, were there any other efforts by your office to ensure that

Ms. McRobbie received the licence that I referred to?

HON. MR. VANDER ZALM: Mr. Speaker, I am not convinced that

there was ever any political interference, and I am not aware of what it

is he might be referring to.

MR. SIHOTA: I want to refer to some new information. The

Premier confirmed that in April of 1988, Mr. Toigo placed a call to his

office wanting to know why there was a delay in granting the licence

for a beer and wine store to Ms. McRobbie. Will you confirm that?

HON. MR. VANDER ZALM: Mr. Speaker, first of all, if the

research on this is as good as what we've seen in past allegations, I

really can't give it a whole lot of credence. But I can assure the

member that I have no knowledge of that.

MR. SIHOTA: Will the Premier confirm that his office —

namely, the Premier's office — was advised that this.... Let me put it

this way. Is it not true, Mr. Premier, that your office was advised

that this call came after Mr. Toigo had been notified that no licence

could be granted to Ms. McRobbie in light of the fact that a moratorium

was in place?

HON. MR. VANDER ZALM: Mr. Speaker, I don't know what he's talking about.

MR. SIHOTA: Will the Premier confirm that his office placed a

call in April of 1988 to liquor licensing officials inquiring whether

or not a licence had been granted to Ms. McRobbie and insisting that

the licence be granted to her, notwithstanding the fact that a

moratorium was in place at the time?

[ Page 8726 ]

HON. MR VANDER ZALM: Mr. Speaker, I still don't know what the

member is talking about. I will say that I didn't even know the name

McRobbie until I saw it on TV a long time after.

MR. SIHOTA: Will the Premier confirm that, as a result of

this second effort to involve his office in this matter, officials from

liquor licensing responded with an explicit memo outlining why a

licence could not be provided to Ms. McRobbie under the circumstances?

HON. MR. VANDER ZALM: Mr. Speaker, I'm sure that the member

for Esquimalt, as he so often does, is hoping that if he can use a

bunch of assumptions and allegations, and if he repeats them often

enough, somebody in the media will pick up on it, and that regardless

of the cost, who it hurts or how improper or inaccurate it might be, he

may gain something with it politically. So he keeps going on. I still

don't know what he's talking about.

MR. SIHOTA: Will the Premier confirm that copies of this memo were sent...?

HON. MR. RICHMOND: A point of order, Mr. Speaker. We have

listened to this line of questioning now at length. I have let the

member go on and on without interrupting. The Premier has said on

several occasions that he knows not of what the member speaks, and I

don't think the member does either. I would point to standing order

47A(a): "...only questions that are urgent and important shall be

permitted." I would suggest, Mr. Speaker, with the greatest of respect,

that the member is out of order.

[2:30]

MR. SIHOTA: A question to the Premier. Is it not true that

copies of that memo were sent to Mr. Doney, the Deputy Minister of

Labour, the Minister of Labour (Hon. L. Hanson) and your office? Will

you confirm that your office received this memo?

HON. MR. VANDER ZALM: The only thing I can confirm is that

this member is obviously on some wild-goose chase.

MR. SIHOTA: Will the Premier confirm that notwithstanding the

receipt of this memo, his office continued to insist that liquor

licensing officials provide a licence to Ms. McRobbie?

HON. MR. VANDER ZALM: We could take up the whole of question

period. I don't know what benefit it is to the people of this province

to be paying the sort of cost it takes for this Legislature to sit and

have this member go on,"Will the Premier confirm, will the Premier

confirm," and me getting up to say I don't even know what he's talking

about.

I have to repeat that I don't know what this member is talking

about. He keeps saying: "Will the Premier confirm...?" We can go

through this exercise and use up the whole of question period, and I'm

sure we'll continue to hear the same thing. I don't know what he's

talking about, and I don't suppose he does. He can do all of the

muckraking that he's been so good at for so many weeks in this

Legislature, but I don't think the people of this province really

appreciate the cost and the time in question period, which could be

used to ask urgent and important questions, being taken up with this

line of.... I don't even call it questioning. I don't know what it is.

MRS. BOONE: Sit down.

HON. MR. VANDER ZALM: The member for Prince George says: "Sit

down, sit down." He keeps getting up and repeating the same thing. I

guess maybe question period doesn't mean a whole lot to the NDP. I

think they've proven that. Mr. Speaker, I can only say that I value

question period. I think it's an important part of democracy. I think

it has to be used appropriately and properly, and we need to follow the

rules.

MR. SIHOTA: The truth is an important part of democracy.

The opposition wants to know the truth.

A question to the Premier. Would the Premier confirm that with

respect to the memo to which I allude, his government appreciated the

political consequences of that memo and ordered the shredding of that

memo? Will he confirm that much?

HON. MR. VANDER ZALM: I don't know what the question is, but

I can assure the member and the House again that I don't know what this

member is talking about. I haven't a clue of what this member is

talking about.

PRINCIPAL TRUST INQUIRY

MR. CLARK: A question to the Minister of Finance and

Corporate Relations. The Code report on the Principal Trust affair,

which was delivered yesterday, is a scathing indictment of the

regulators and the politicians in Alberta. You and your ministry knew

that those companies were insolvent, yet you deferred to the Alberta

regulators. Your chief regulator testified before Code that he wouldn't

put a nickel of his own money into Principal Trust, yet this government

continued to allow Principal to keep operating. In light of the Code

report, has the government finally decided to live up to its

responsibilities and publicly commit to compensate those investors who

lost their money because of negligence on the part of you and your

regulators?

HON. MR. COUVELIER: I'm indebted to the member for raising

this timely question. It certainly has attracted a lot of current media

attention, so it is appropriate that we spend a few minutes discussing

the plight of these innocent victims. There are a number of points that

I would like to make, Mr. Speaker.

First of all, it should be pointed out for the benefit of the

House and those who might not yet have read

[ Page 8727 ]

the press reports that the Code report, as I understand it, makes

very little reference to the B.C. situation. Unlike the innuendo

implied by the member in his question, the Code report seems to be

pointed almost exclusively at Alberta regulators and politicians. I

think that should be established for the record.

Secondly, we did have a representative in the courtroom yesterday to

receive the documents from the inquirer, Chief Justice Code, and as a

consequence those documents have been brought back. They landed on my

desk for the first time just about an hour or an hour and a half ago.

We obviously will need time to examine the contents. There are 600-odd

pages. There is no executive

summary, so one must be diligent and

patient in order to mine the worth of the document. Therefore, we will

have to take some more time.

I have told members of the media who have been questioning me on

this point that I did not think it appropriate at this time for

politicians of any political party to be playing mind games with these

innocent investors who have suffered long enough. It did seem to me far

more appropriate that we should take time to study the document and its

recommendations, not only in the interests of those investors — some of

whom have lost their life savings — but also in the interests of all

taxpayers who might supposedly be impacted by any decision by the

government to intervene. That's not to say that as a consequence of the

Code inquiry's recommendations the Alberta government will be driven by

the same compulsion.

This inquiry has taken almost two years. It has been a very

high-profile legal situation in the province of Alberta and certainly

has impacted many of their previous and current political figures.

Therefore it does seem quite likely to me that the province of Alberta

might address the issue some time next week and I've seen press reports

that suggest that will occur. It's not inconceivable, given the fact

that we just received the document for the first time an hour or so

ago, that we may have a response from the Alberta government prior to

we in the province of British Columbia having an opportunity to respond.

I certainly am pleased with the question. I m happy to advise the

House that we in the government will remain ever-sensitive to the

plight of these investors, and intend to deal with the question after

we've had a chance to examine what the Code report says and after we've

had an opportunity to deal with whatever response the Alberta

government might choose to make. I make that statement on the

assumption that the Alberta government will deal with the issue sometime next week.

On the last point....

Interjections.

HON. MR. COUVELIER: This is a very high-profile and emotional

issue. The question came from the opposition. As the Premier said,

question period is an important part of our legislative function here.

The last point I want to make, Mr. Speaker — and I will be brief in

the interests of the House — is on the question of prime jurisdiction.

As you know, I am chairing a national committee which is attempting to

reach conformity across all the provinces as to how we regulate

financial institutions. One of the basic ethics of that investigation

on which we are embarked is that the prime jurisdiction — the

jurisdiction in which a provincial registered company is headquartered

— should have the prime responsibility for dealing with any subsequent

failures of those companies if they operate extra provincially.

We are a long way short from having agreement on that principle, but

certainly this particular case highlights the urgent need to deal with

that question, and I am very pleased that I have been given the

national responsibility to chair that committee in the interest of all

Canadians.

Hon. Mr. Richmond tabled the 1987 annual report of the B.C. Housing Management Commission.

Orders of the Day

HON. MR. STRACHAN: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF

SOCIAL SERVICES AND HOUSING

On vote 64: minister's office, $301,553 (continued).

MS. SMALLWOOD: I want to move into the area of children's

services because I think it is a very important area. Before doing so,

I would like to finish up some of the issues of poverty.

The minister said that his job strategy is that a component of

income assistance recipient, your social service programs, was

targeting employment opportunities for people that paid something like

$10 to $13 an hour. I have statistics here that show that about a third

of all the jobs created in Canada in the last few years are jobs that

paid $5.24 an hour. That's a maximum earning of $10,900. That too is

well below the poverty line. I want to emphasize to the minister that

unless you as a government deal with issues of poverty in a more

comprehensive way, this trend will continue and we will see an

increased number of people relying on income assistance and support

from government, because the alternatives are not out there. People

cannot support a family on an income of $10,000; it's well below the

poverty line.

I want to emphasize another thing. Earlier this morning we read out

several budgets of families that are either living on income assistance

or are living below the poverty line — the working poor. Many of those

families were living in subsidized housing. I have some tables here

that were included in SPARC's report earlier this year on the cost of

living. It's very interesting to look at how much it costs for housing

[ Page 8728 ]

in the lower mainland, indeed anywhere in this province. The vacancy

rate: we talked about this earlier, and we will certainly talk about it

again when we do the housing part of your ministry. The amount that it

costs to rent a one- or two-bedroom apartment, and comparing that with

the maximum GAIN allowance for shelter.... Repeatedly what is shown —

this is from the minister's own statistics — is that in each and every

category people in this province are paying in excess of their shelter

allowance for shelter. For a single man it is 28.9 percent over the

shelter allowance; a single woman, 39.6 percent. I think that reflects the fact

that shelter for single women is not as accessible as for single men.

Two parents with one child: it ranges from 29 percent of all recipients

paying more to 32 percent. One parent with four children: 35 percent of

those people reported that they were spending more than their shelter

allowance on shelter.

[2:45]

This minister says that they are meeting the poverty line in

British Columbia, which is not borne out by the statistics, by the

policy groups that study this area. The ministry's own statistics show

that recipients of GAIN shelter allowance are paying out of their food

money to keep a roof over their heads for their children. Up until

recently they could compensate by taking advantage of food banks in

many different communities. Unfortunately, in the last while we're

beginning to see some of those food banks close down, and some that are

hanging on are certainly at risk of not being able to serve the number

of people who call. This government has an abysmal record as far as

poverty is concerned.

I know there are other people who want to touch on it. I'm hoping

that the minister will comment on the impact of the unemployment

insurance decision on income assistance — the pressure that will be

brought to bear in the next year as this policy of the federal

government is implemented and as our seasonal workers, the people that

are working this summer, are unable to get the weeks in that they're

going to need to be able to count on unemployment insurance.

I'll leave it at that and let the minister comment before wrapping up the poverty section.

HON. MR. RICHMOND: Mr. Chairman, I wonder if I might ask leave of the House to make an introduction.

Leave granted.

HON. MR. RICHMOND: Mr. Chairman, seated behind me and to my

left in the House today is one of the assistant deputy ministers from

our ministry, Mr. Sam Travers, whom I introduced to you earlier. Of

course, we all have our crosses to bear. But I like Sam; he's a nice

guy anyway. Sam is very lucky, because he has a lovely wife, Linda, who

is in the gallery today with their two sons, Mike and Graham. I'd like

the House to commiserate with them and to wish them welcome.

HON. MR. RICHMOND: While I'm on my feet, I just wanted to respond to a couple of things the member said.

The shelter allowance was increased on July 1 of this year between

4.5 percent and 10 percent, depending on the size of the family. We did

recognize that there was a problem in shelter allowances — we're very

much aware of that — especially in the lower mainland and Victoria. We

did increase the shelter allowance, as I say, up to 10 percent.

Yes, the Unemployment Insurance decision of the federal government

will probably impact on this government and on this ministry in

particular. The minimum entrance requirements will change and the

duration of benefits. All of those will have an impact on us. It's

difficult to say at this time just what the impact will be. In fact,

it's probably impossible, There's no question that it is shifting the

tax burden from a federal level to a provincial level. I guess only

time will tell us how much that shift in tax burden will mean to the

province.

I suppose I should remind everyone in this House and the federal

government and everyone else that while there may be three, four or

five levels of government in this country, there is only one level of

taxpayer. Whatever way they shift the burden, it's going to come out of

the pockets of those very same taxpayers. Probably by this time next

year we will know to what extent the UI decisions have had an impact on

us.

MR. WILLIAMS: I listened to the debate earlier this morning

between some of the members from our side and some of the members from

the government side, and there was rhetoric on both sides. I think

that's fair to say, I'm one of the more affluent people in our society,

I have to admit. I honestly don't know how women alone with families

can get by on the kinds of numbers they have to get by on. I simply

don't know how they do it.

Most of the people in this chamber have disposable income that we

can literally waste that is the equal of their full incomes in a month.

I think we're such a distance away from those problems. Some of us were

poor at an earlier stage in our lives, but at the same time, I think

it's much more difficult today than it was in earlier times.

I'm looking at the budget of two women: one a working mother and one

a woman on assistance. They're both in the same ballpark. The working

mother — a single parent with one child — has net earnings of $902.44 a

month. She's one of the working poor. It's these women that are really

carrying the burden of so much of the next generation in our society.

We don't value them enough, and we don't value their jobs enough.

I have trouble with this ministry because I'm afraid that

historically — and I'm not up to date on it — it's not a ministry that

has attracted the range of people and the quality of people needed to

take it out of the old welfare syndrome. I do think that that's an

obligation in a rich society like ours that we should all have in this

House and feel.

[ Page 8729 ]

I felt it more severely this session when we had a whole group of

working single mothers and some on assistance meet with our caucus in

the last month. I don't know if they met with the government caucus or

not; they met with the minister. I have to admit that I was really

moved by that occasion. These are women that are in fairly tough

straits, doing the very best they can and far better than most of us

could do on these limited funds. It seems to me that we've got to take

it out of the ministerial structure that it's within.

I think part of it is that we're stuck in ideology on both sides

here. There's a standard Socred view about these people who don't want

a job and there are jobs out there. There's the old bleeding-heart

attitude about the opposition. There's some truth in both those

stereotypes, but if we were more serious about this question, we'd

start pushing aside the rhetoric and the stereotypes.

I happen to believe that North America has moved forward in the last

two generations as a result of good wage policies. Good wage policies

have moved forward the North American industrial machine. I'm afraid

that too many on the government side see higher wages, a higher minimum

wage and all of that as something that would be a problem for society.

I don't think the analysis has been undertaken of what better wages

mean in a society and what they in turn mean to the industrial machine.

just because some skinflint proprietors keep pushing for low wages

doesn't necessarily mean that it's the best answer. You don't have to

buy the Fraser Institute argument that if you raise the minimum wage,

there won't be work for people in that bottom end of the spectrum. I

don't believe that for a minute. I don't think the analysis is there

that will justify it.

So it seems to me that you have to step outside your ministry. As

minister responsible for social policy in cabinet, it seems to me that

you have a double obligation to step outside of the old welfare

syndrome, which I think you're still too burdened with.

When I look at these budgets, for example, this woman, a single

working mother, has rent.... These are budgets where there is

subsidized housing or cooperative housing; I'm not dealing with market

housing at all. That's another segment of your portfolio where there

clearly is not any new initiative. But the woman with $902 net wages a

month has co-op housing rent of $359; hydro, $36; telephone, $17;

transportation, $76; cable, $13; food, $300; vitamins, $40, because of

allergies and other problems; sundries, $35; child care, $10; clothes,

$30; and other incidentals, $45. It gets past her actual net income by

about $100.

Clearly we have a job to move up the lower-income strata in our

society. I am saying that the economic system out there can afford it

and can carry it. And we, unrealistically, are keeping that whole

system down. We might be surprised at the positive possibilities.

The minister this morning said that the member for

Surrey-Guildford-Whalley (Ms. Smallwood) was so off-base at points that

it almost became embarrassing, because there was reference to Africa

and access to ground and food and growing your own food. Well, I didn't

feel that way. But the reality is that if you're in the metropolitan

area, renting an apartment, it means you don't get out to a garden and

can't grow food. So what we're really talking about is empowerment. In

a sense, that's what you're looking for too, and by some of the

policies you have. The real challenge is empowerment to these people,

and one of the ways is access to food. If your ministry was more

creative....

I can think, for example, of Chicago where there are some

interesting innovators who have looked at problems of people in poor

neighbourhoods where there were respiratory problems. They found that a

lack of vegetables was the main cause of respiratory problems among the

poor in Chicago. So these innovative people in the neighbourhoods

starting getting funding for greenhouses on the roofs of apartments,

because the apartments were leaking heat out through the roof anyway.

Chicago is the windy city, as we all know. So there was this really

creative idea. The elderly in the neighbourhood started working in the

greenhouses producing vegetables, sharing them with the people in the

building and the community, using the excess heat and improving their

health in the process.

It's that kind of creative exercise in neighbourhoods that I think

your ministry could be looking at and be involved in helping to empower

people. That means garden plots, greenhouses and things like that. It

may sound corny or romantic, but it is a simple empowerment for people.

If the ministry started looking at it that way, we'd get out of the old

stereotype between you guys and us guys, because that's highly

unproductive for all of us and certainly for the poor and the working

poor. I think that's the challenge: to get out of the narrow mould that

this ministry has been in for all too long. Let's be honest about it.

I'm not sure that it's a penance now to be minister of human

resources, but I'll tell you a few years back, when the first member

for Little Mountain (Hon. Mrs. McCarthy) was under Bill Bennett, it was

penance. Yes, maybe some others as well. The Premier might have some

comment on that; I don't know. Was it penance at one time, Mr. Premier?

I don't know. But I'm sure satisfied that it was with the member for

Little Mountain under the former Premier, and it shouldn't be. The

ministry of human resources should not be a penance job in cabinet; it

should be a creative one.

When you look at this, there are no extras for these people. Some of

the morality squad on one side of the House may complain that they

spend money on cigarettes. When I looked at one budget yesterday, I

complained that it included Pampers, but that shows you what generation

I'm from and what sexist angle I probably have. All those aside, at the

same time, this is very tough stuff for these people. If we moved

outside the traditional mould in this ministry and looked at things

like community economic devel-

[ Page 8730 ]

opment, for example — which we don't do in this province — and

empowering people in neighbourhoods.... There are little groups in the

downtown east side, like DEEDS — not DERA, although they're both good

outfits; both probably with different politics — setting up little

businesses such as repairing bicycles in the downtown east side and

employing a few people that way. That's no way to change the world, but

it's a beginning in communities where there's little in the form of

beginnings.

[3:00]

I would hope that the minister and the ministry would think a little

more seriously about the minimum wage. Come on. It has to be up around

$7.50. If we just parlayed it from what the minimum wage was when we

were government in '75, it would be at $7.50 today. Can you really get

by on that kind of money? Just barely. It isn't good enough that people

have to live with their parents for a longer time and all that sort of

stuff; $7.50 is a very modest income with today's costs. But that would

be part of the process of lifting up the wage structure in what is a

very rich province. It's that bottom end that we've got to lift up, and

we can't do it with the Lady Bountiful, charity and welfare stuff.

We've got to do it throughout the whole structure, and we've got to

have a more sophisticated view of the labour market.

The minister talked about the jobs out there, and I went and read

that

article in the Vancouver Sun . I don't know if I have it here. A

big chunk of the problem was clearly training. For some of them it

wasn't, but the bulk of them needed trained people We don't have the

kind of activity yet going on in terms of manpower, training and all

the rest of it to really do quite the job that is needed.

That's a big challenge. If you guys want to improve your place In

the polls, this might well be a serious place to begin that process.

HON. MR. RICHMOND: I appreciate the member's comments; I

truly do. I too believe that we should remove the rhetoric from this. I

don't like to get involved in rhetoric when it involves social

services. I do it in response, usually; I never get into it first. I

agree with you that we should stay away from it, because there is too

much stereotyping of ideologies — where we stand and where you stand —

and that doesn't do the people out there that we are looking after any

good. I appreciate your comments.

One lighter comment is that I have never looked upon this job as penance. Maybe

others have; I am not so sure. I don't think I will ask the people sitting

around me; I will leave that one. I accept this ministry as a real challenge

and a chance to do a few innovative things, and I think we've done that.

We haven't made all the progress that you speak of, but we are getting there.

We have done quite a few innovative things, as I look back over the last few

years, in trying to break the syndrome of welfare. We now have some third-generation

welfare families, and that concerns us greatly. This is why we have put some

of the programs in that we have — to break that syndrome. It's difficult.

When I met with the ministers from across the country, they were all attempting

to do the same thing.

I don't think that we can, as you say, operate from a narrow

framework, keep our head in the sand and just keep dishing out income

assistance. We don't believe that either. In the last two years I have

taken the social policy committee of cabinet throughout the province to

meet the people of whom you speak. We have met with every manner of

group and individual that you can name in this province. I too have met

with the group of women of whom you spoke. I am always touched when I

meet with people like that who are less fortunate than I am. I wish I

could have an instant solution to help them, because there are some

tragic situations out there. We are addressing them.

We are also looking to the future. We in the social policy committee

don't just sit around and become administrators, although it's easy to

fall into a trap like that. We do have sessions where we listen to

outside experts, people who are from outside this box that we are all

in, and we are going to be doing that again this fall. I guess this is

as good a time as any to tell people that the social policy committee

will be meeting in a two-day-long think-tank session in October to do

just what you said. We are bringing in some outside people, experts in

their own field, to talk to us about demographics, where we are headed,

how immigration will affect us and how industry will affect us, so that

we can set the social policy.

Interjection.

HON. MR. RICHMOND: All right. I would appreciate any names

that you have. We have two or three that we are bringing in who are

respected in their field, and they are interrelated so that one can

follow the other to give us an overview of where we are headed and what

we do about the working poor, about those on income assistance, etc.

We don't have a standard view of people and, contrary to what the

member said, we don't look down upon people who are less fortunate than

ourselves. We do our very best to assist them. We can't do everything

for everyone every time that we are asked, nor do I think we should try

to aim for that utopia. You are correct when you say that North America

has moved a long way in the last two generations, not only on the wage

side but on the social services side. We have done a lot of catching

up. But we also must be careful that we don't go too far.

I have visited countries where they have done things for all the

right reasons, but they have gone too far. They have gotten into

programs that they cannot afford. They end up by literally breaking the

spirit of the working people because their income taxes end up at 65

and 70 percent, and they have value-added taxes of 22 percent on every

commodity there is. They are even into taxing savings accounts. I don't

think we want to get that far, where you get social programs to where

the people cannot afford them.

[ Page 8731 ]

There is a balance in there somewhere, and I think we are working

towards that, not with our heads in the sand. I appreciate the comments

from the member for Vancouver East. They are always well thought out. I

don't think ideologically we are that far apart.

MS. MARZARI: This morning the minister and I got involved in

a discussion about poverty lines, and there was a suggestion that the

Stats Canada line was the one we should be drawing here in British

Columbia. The minister suggested that — you can correct me here — an

average family of two parents and two children on the Stats Canada

poverty line were looking at $11,800. It seemed awfully low to me at

the time.

I've just had a quick look at the Stats Canada poverty lines, and a

single person living alone is at $11,180 according to the Stats Canada

poverty line. When we're looking at two parents with two children, the

Statistics Canada poverty line is $24,481. That's in an urban area,

and in a rural area it's $18,000. There was a suggestion by the

minister that we weren't doing so badly vis--vis the Stats Canada

poverty line. With this check I'd suggest we're not doing very well at

all.

When I suggested to the minister he should look at the SPARC line,

the minister suggested the SPARC line wasn't relevant to our discussion

since it didn't take into account earnings exemptions. Looking at the

earnings exemption, I would like to add this comment. The earnings

exemption of $50 or $100 a month basically covers the cost of earning

extra money. So $50 a month to cover bus fare.... A bus pass for a

student costs $30 a month in Vancouver. So $50 or $100 a month barely

covers the costs of actually getting up and going to work, buying the

clothes and providing the child care. In fact it doesn't come anywhere

close to covering the cost for providing child care.

So when the minister says the SPARC line doesn't take into account

the earnings exemption, I suggest to the minister that the individual

who is earning a bit extra and using that earnings exemption is very

often not any better off than the person who remains on welfare. There

is also a suggestion that there are a lot of people earning above the

exemptions or earning on the side, but I don't know of any numbers to

suggest how many people on the welfare assistance rolls are in fact

earning above any exempted level.

Consequently, I just wanted to read that into the record to let the

minister know that perhaps in the SPARC poverty line, he's dealing with

a line which is a lot closer to what he might want. It's also

interesting to note that the SPARC poverty line is $3,000 lower a year

for a family of four than is the Statistics Canada poverty line. So it

might be more useful for him to look at the SPARC poverty line, since

it is a market basket approach in British Columbia.

The point has to remain that our welfare rates don't come anywhere

close to filling the gap; in fact we are no closer than we were five

years ago. Perhaps the latest raises make a difference, but in fact the

gap is widening in the number of poor people in our community.

The reason I raise all this is because I look at the Ministry of

Social Services as the ministry that can do the most for women in our

community, largely because — sadly to say — women comprise probably the

largest group involved with your ministry. We talked about this a

little this morning. They are the poorest; they are the most

vulnerable. Poverty has a feminine face. They earn 60-cent dollars.

It's likely that they'll be needing subsidized housing, better police

service and safety — perhaps more than men. It's likely that they will

need transition houses. It's more likely that they'll need a supplement

to their pensions, because every step along the line women are put in a

marketplace and earning fewer cents on the dollar vis--vis their male

counterparts. Every step along the line we pay for their poverty.

I very often ask myself why we don't give them the money. They are

now asking that question: give us the money, the pay equity, the

affirmative action and the programs we need just to earn the money we

deserve. But our system and our society really does choose to give them

the social services, the subsidized housing, the transition houses and

other techniques of holding or withholding, in which theirs is not the

choice; theirs is only to follow orders and to beg and become

supplicants for service. It would be much cheaper to just give them the

money, Mr. Minister.

The other reason I think the Ministry of Social Services is worth

looking at as the ministry that can most help women is because from

your vantage point, Mr. Minister, the Ministry of Social Services is

the most capable, because it is most attached to the vulnerable groups

in our community to effectively coordinate comprehensive services, to

take a new look, to create a new vision for our community and our

society. You really are in a position to look to other ministries and

to pull them into the planning and coordination of services which might

help, rather than disempower, women. By that, I mean I would like the

ministry to pay more attention perhaps to minimum wage, working more

closely with the Ministry of Labour to talk about minimum wage,

particularly for farm workers, for domestic workers, who are not on the

regular minimum wage at all.

[Mr. Rabbitt in the chair.]

For example, because you deal with the Ministries of Health and

Education in child care, it's incumbent upon your ministry to start

working more closely with them to ensure that day care centres are

built in schools, to ensure that children receive the best health care

they possibly can. In the native community there is every reason to

suspect that the ministry should be more involved with coordinating

transition houses for native women, who are even more vulnerable than

urban white women in our community. I look to your ministry as a

coordinative place, as sort of the hub of a wheel, if you like — the

place where

[ Page 8732 ]

many threads connect in the quilt of social services that we have in our community.

[3:15]

The final reason I rise on this point is that I look to your

ministry especially to coordinate services and to develop some answers

and solutions to our problems of child abuse. This morning I used the

cost to society of abusive parents as an example of where we might cut

back on community services. The services that I enumerated, such as

police costs, jail costs, hospital costs, all incurred by an abusive

parent, are costs that you don't generally associate with social

services. They are so much part of the norm that you don't consider

them to be social services. But they are taxpayers' dollars. I

suggested to the minister that we deal with the root of the problem:

that child abuse in our community could be eradicated by a concerted,

comprehensive effort.

My question to the minister at this point is: where is the plan for

British Columbia to develop the comprehensive, integrated service

network that will deal with our society's dirty little secret that is

child abuse? Just recently 32 people — staff people, nongovernmental

people, ministry people — from British Columbia went to a federal

conference in Ottawa on child abuse, on sexual abuse. They have

returned. I gather there is a $40 million fund offered by the federal

government for the next four years for the coordination of integrated

child abuse services. I gather that this fund is looking to each

province to develop a plan and a coordinated network of services that

will deal with this problem, hopefully with the causes as well as just

the results.

I would ask the minister what he is doing in his capacity as a

coordinator and a puller-together of the threads of community services.

Where is the plan for the B.C. component of the $40 million federal

program? How can we see ourselves past the four years that this $40

million will last? Does the minister have a long-range plan for the

coordination of these services?

HON. MR. RICHMOND: I appreciate the members comments,

especially as they pertain to child abuse. Probably the most difficult

part of our ministry to deal with is the phenomenon of child abuse.

It's been with us for many years. Just now, though, a lot of it is

coming to light from incidents that happened many years in the past,

and all of us are learning an awful lot about child abuse and abusive

people. There are many statistics out and many books being written on

the subject. I've recently read two or three myself. Some of them

contradict each other. Nonetheless, child abuse is probably the most

difficult thing to deal with in this ministry.

You must remember too that our ministry is responsible for children.

Therefore we see the effects of it. We always are brought in after the

fact to deal with the effects of child abuse. As the member says, in

some cases — and the statistics vary, depending on which book you read

— abused people go on to become abusive people. The very latest book I

read said it was about 30 percent. Another study has just been

completed on the east coast of this country, in Nova Scotia, as to

whether the incidence of child abuse is on the increase or whether

we're just hearing more about it these days. The results of their

survey seem to be that child abuse is not on the Increase, thankfully,

but that we're hearing a lot more about it. A lot of people are coming

forward who were abused as children as long ago as 20 and 30 years.

It's a difficult problem, and one that we're taking an integrated

approach to. In the Cabinet Committee on Social Policy it's high on our

priority list to address all aspects of abuse — child abuse, spousal

abuse, any kinds of personal abuse. It's an interministry function and

we are addressing it on that basis. All the social policy ministries

are involved.

We have, arguably, the best interministry child abuse handbook

available. We have just published a third printing of it, and it is

much in demand by social service agencies throughout North America. We

ship copies of this manual all over North America. It has become a

standard of social service providers and agencies as a handbook on how

to deal with child abuse. It gets very involved. I won't go into it. I

am sure the member has a copy; if not, I would be glad to provide her

with a copy of the book.

We are very cognizant of this social problem that we have, and I just

want to assure you that we are taking a coordinated look at it through

all the ministries involved: the Attorney-General, the

Solicitor-General, the Ministry of Health, everyone. It is a very

vexing problem.

I have not heard of this program that you have spoken of from the

federal minister, but I can assure you that if there is federal money

to be had there and we can spend 50-cent dollars, or whatever the split

is, we will do so. We feel we're out in front of this problem as far as

anyone is out in front of It, and we intend to stay there.

Just one statistic that might interest you back on the other subject

of enhanced earnings is that we do have a lot of people take advantage

of the enhanced earnings exemption to bolster their meagre incomes that

they receive on income assistance. I admit, they are meagre in

comparison to what the rest of us have. As your colleague from

Vancouver East said, most of us have more disposable income than these

people have for total income. However, they can enhance their earnings

considerably with the new enhanced earnings exemption, and we have

14,000 people at any one time taking advantage of the enhanced earnings.

MS. MARZARI: - Perhaps the minister would recognize the program as

the $40 million allocation to federal family violence initiatives....

Interjection.

MS. MARZARI: Yes. And members from your ministry in fact did

attend the conference and I gather are involved with trying to bring

together some kind of a federal group. But the concern around the

family initiatives program federally is that the

[ Page 8733 ]

$40 million has been pooled together for ten provinces over four

years. It doesn't break down into a great deal of money per year per

province as all these federal things do when you really look at them

and you crack them out. The numbers over seven years look so great, but

when you break it down it's not so wonderful.

The concern here, Mr. Minister, is that it's fashionable now at the

federal level to talk about sexual abuse and family violence, but in

four years' time that money's going to dry up and we might find that a

lot of federal dollars presently going into provincial coffers for

family violence, for sexual abuse programs, might dry up and I would be

very concerned that the minister keep on top of that to ensure that

there is a continual flow of federal dollars towards these programs.

I think, too, that we want to look at family violence, which is

inextricably linked to child abuse, which is inextricably linked to

alcoholism, which is inextricably linked to what is turning out to be a

regular pattern in our community, only recently brought to light in any

serious way by court cases in which women are taking stronger voices in

bringing their concerns, their memories and the atrocities committed

against them to public light. If it were not for these women, we would

not be seeing these statistics and getting a better picture of the

total costs of family violence and abuse.

I think it might be worthwhile to turn for a few minutes to the

transition house system that we have Once again, Mr. Minister, the

transition house system is the end product of a system of abuse and of

violence, a system that says we should provide a safety net for the

woman and her children who are in danger in a system which very often

lets the abusing man go free, or makes it very difficult to effectively

penalize him or bring him to court or bring him to justice.

I say this to the minister: transition houses, as they are a stopgap

measure in the larger picture, have to be dealt with here and now. I

regard them as something like food banks. One must deal with the

repercussions of violence just as one must deal with the repercussions

of a society that doesn't feed its citizens well enough. We must

provide battered women with places of refuge, and we must do that while

we are fighting the larger battle, which is the battle of dealing with

violence in our community and the disempowerment of women and the

ownership of women and their children.

I would ask, then, how many new transition house spaces the minister

has installed in the last year. I would ask the minister if he has

considered the grant for the B.C. and Yukon transition house society,

which has remained stable at, I gather, $85,000. Has he given any

further consideration to the amount of support work which the

B.C.-Yukon society needs to do with its network of transition houses in

our community? Has the minister thought further about providing money

for counselling services for these houses? Right now the houses' per

them only allows for a safe bed; it allows for no supportive counselling; it allows for no additional or needed staff to come in to

provide the transition that's required for women to leave those houses

again in one piece.

I would ask the minister, too, if he has considered or is

considering the need for a transition house for native women, perhaps in

Vancouver where the need is great, because native women, as I've

suggested before, are particularly vulnerable. Many are single parents.

In 1981 the census found that the percentage of aboriginal families

headed by single parents was almost double the percentage of

non-aboriginal single-parent families. Very often single-parent

families in the native community are victims of violence, and they feel

very alienated from services offered by the white community in this

country. There are some appalling statistics about native women and

their abuse which have come out of a number of studies that have been

done over the last few years. They undoubtedly have to do with poverty.

They undoubtedly have to do with disempowerment, in a culture which is

removed from its roots. But it would seem quite apparent that there is

a very vulnerable group of women, native women, who are really in

double jeopardy in our community, removed once by the fact that they

are not part of our mainstream of white society and removed twice by

the fact that there is a good chance that they'll be single, in

poverty, and possibly battered.

So those are the three questions I would like to put forward to the

minister around the transition houses and around special needs for

native women.

HON. MR. RICHMOND: I'll try to address your concerns as best I can.

Our budget for emergency shelters this year, 1989-90, is $6.06

million, an increase of 18.4 percent. So I think that reflects the need

and that we're responding to the need for emergency shelters. We have

over 419 spaces available now in the province. But I think it's

significant that this coming year there's an increase in the budget of

18.4 percent.

Some enhancements that we've done for 1988-89: in Kamloops, the

YM-YWCA women's hostel, $104,567; the Victoria Transition House,

$13,000; Homestead Vancouver, $144,000. On the Island there are the

Vancouver Island Haven Society, Parksville safe homes, Powell River

safe homes, Port Hardy safe homes and Courtenay safe homes, for a total

of $121,500.

Project Haven is the federal family violence initiative in which

CMFIC covers capital costs and the province is expected to cover

operating costs. It has generated requests for funding in Matsqui,

Abbotsford, Victoria, Duncan and Smithers, and more can be expected. We

have recognized the need to enhance these facilities. The 1989-90

budget increase of $1 million will be used for the Project Haven

initiatives to enhance the facilities in Penticton and to fund

second-stage housing at the Cridge Centre in Victoria.

[3:30]

The B.C.-Yukon society that you mentioned: we are talking with them at the moment. We haven't

[ Page 8734 ]

come to any conclusions from talking with them, but we are negotiating with them at the moment.

I can also tell you that we are looking into a transition house in

Vancouver specifically for native women. We had a good meeting in

downtown Vancouver about two months ago with several native leaders to

talk about problems specific to urban natives. One of the largest

native populations we have in British Columbia is in downtown

Vancouver. So we have a couple of pilot projects going there, in

conjunction with the native leaders — various segments of their

community — to address some problems, as you mentioned, that are

specific to their needs, and one is a transition house for native women.

MS. MARZARI: Talking about connections and using your

ministry as a hub for coordination of other services, I want to talk

about your ministry's relationship to the Attorney-General's department

in terms of the real costs that we all bear, that the welfare system

bears when dealing with people who need its services.

The access to justice issue for women has been with us for a long

time. In this year's session, a number of justice bills have come down

which basically have dealt with the reorganization of the courts and

integration of certain of them into the federal courts so that there

will be, I gather, a different cost-sharing between federal and

provincial courts and a smoother flow of procedures through the courts.

The one thing that stands out as missing in that coordinative effort

is, in fact, the unified family court. It is the welfare department. It

is the Social Services ministry that deals on a day-to-day basis with

vulnerable women who have been left by their husbands, who stand a 70

percent chance of having the bottom fall out of their economic world,

not to mention their personal world, and who are seeking some form of

subsistence, whether it be from welfare or from support payments.

I'm asking you now, just as I've asked you about your coordination

with other ministries regarding child abuse and transition houses: how

are you working effectively with the Attorney-General's department in

pushing towards a unified family court system? Second question: how are

you working with the Attorney-General's department on the Family

Maintenance Enforcement Act, which we are told is in disrepair? We are

told that once a woman gets on welfare, she is told that she must use

the welfare access to the Family Maintenance Act. Women have been told

literally that they must wait three to four months before they can get

any action going through the welfare route. Once on welfare, they are

told that they don't have alternative access to that maintenance

program. We are also told that the maintenance program, even if they

did have independent access to it, isn't doing all that well in keeping

up with its backlog.

In human terms, this is a tragedy, because of the amount of

suffering and pain that women go through with the business of

separation, let alone the economic pain of trying to feed a family

while waiting for maintenance cheques to come in. More important for

your purposes and the purposes of your budget, Mr. Minister, is the

sheer money lost in not being able to access family maintenance

payments from a husband who has absconded with the funds. I would ask

you then about costs of justice here — are you working on that?

HON. MR. RICHMOND: On the family court system and working

with the Attorney-General, we are working as cooperatively as possible

with his ministry as he revamps the court system to give broader and

easier access to the courts by having extended sittings and various

other things that he's doing in his ministry, and we will be working as

closely as possible with him to facilitate that.

On the maintenance payment thing, you're right. It has two facets.

It has the part that comes under the Attorney-General, where.... Let's

use an example of a woman whose husband has left her but she has a

judgment for maintenance of X dollars per month. She can go to the

family maintenance people and have that enforced. In fact, there are

reciprocal agreements with other provinces in Canada and other

jurisdictions outside Canada so that women need not go back to court

again to get a judgment enforced. Wages can be garnisheed, etc.

If that same woman comes into income assistance or welfare, if you

like, then yes, it is compulsory that we take over the maintenance

order that she may have from any court. We go after that errant spouse

whoever he may be and collect that money on her behalf. After we

thought it through and thought of all the angles on it, that is the way

it should work. We have the better facilities to go after that person

and collect the money. Secondly, it's owed to her. Thirdly, if it is

not collected from the errant spouse, then the taxpayers would have to

pick up the shortfall. So what we are saying is: yes, we will collect

it for you, and we will pay you what you are normally entitled to on

income assistance. There will be no shortfall to you there; you will

get what you would get under any circumstances on income assistance.

But the key here is that when you get a job and get back into the

workforce, you will be assured of having that maintenance payment.

Let's use some examples. If you get a job paying $1,200 a month and you

can't make it on that but your maintenance payment is $400, then

perhaps you can make it on your own with a little bit of assistance

with day care.

I think that is the important part of that maintenance: not so much

that we're getting it and saving the taxpayers' money when the person

is on income assistance, but the minute they get a job and leave income

assistance, they still have that maintenance, it's there and they're

assured of getting it.

MS. MARZARI: Two points. I'm really trying to put forward

suggestions that might save the government a lot of money here. I am

told by judges and by lawyers who take these cases to the courts that by

[ Page 8735 ]

moving towards a unified family court and by encouraging the

Attorney-General (Hon. S.D. Smith) to bring in legislation that would

reintroduce the unified family court, we could save considerable time

and considerable money. I gather that at this moment, when a separation

agreement comes along, the initial divorce procedures go to one level

but child custody has to go to another level. I think the first goes to

provincial court and the second goes to federal court. In the mush that

comes out of all that, in the legal fees that come out of all that,

there is an incredible inefficiency, an incredible waste of time, an

incredible waste of money — I'm sure that the ministry is involved with

tracking some of it — and an incredible drain on the family in the

process, which can only lead to a need for further public investment,

for counselling dollars or whatever, that can only drain your ministry

and its clients. The unified family court is something I think the

ministry should review, working closely with the Attorney-General to

bring back something like we had a number of years ago when it was

demonstrated to be a success but never got off the ground.

The second point: the Family Maintenance Enforcement Act. Yes, the

women who come onto welfare get their welfare cheque while the ministry

goes after their errant husbands. But I would suggest to you, Mr.

Minister, that there is a very large backlog right now. There are many

women who don't want to be on welfare. They would gladly pay with their

right arms not to be on welfare. They would like to get their

maintenance as quickly as possible and get the hell out of the system.

I'm suggesting to you that it's not a soft, cushy place for women to be

when they are separated from their husbands. They want to raise their

families on their own. Being on welfare, there's a stigma; many women

feel it. In fact, a majority of people on welfare feel the very strong

stigma of being on welfare. I don't know of anybody, in my 20 years of

working, who has wanted to stay on welfare. I know a lot of people who

have been beaten down and don't see any options or choices for

themselves and don't know what tomorrow will bring, but that's

different from lingering.

I'm saying that there are a lot of women coming into that system who

are basically being told that there is a backlog for family

maintenance, and they're not able to get at it. Is there a backlog? Is

it four months? Is it six months? What do our offices tell people who

are in need vis--vis the welfare system and the Family Maintenance

Enforcement Act?

HON. MR. RICHMOND: Your point on the unified court is well

taken. We have discussed it in the social policy committee, and we will

look into it further. I will take your suggestions to the Attorney.

On the maintenance, one of the problems we are encountering is that

the program is new, and we have a tremendous influx of people who want

to avail themselves of the services provided in the program. We have a

high number of existing and new GAIN clients, mostly single parents,

who have never tried to obtain maintenance orders, and assessments are

needed to determine whether action is appropriate or possible. Fifty

percent of the clients referred to us to date do not have a maintenance

order. In response to this situation, the ministry is changing its

referral and assessment procedures to improve the program's efficiency.

It's new, and we're experiencing this tremendous backlog. I can give

you some stats as of June 24, 1989. Just over 5,000 clients have been

referred to family maintenance workers: cases pending assessment, 2,432;

cases assessed, 3,038; cases with no action being taken, 1,843; cases

with action deferred or waived, 1,195. So far we have collected a grand

total of $414,000 on behalf of GAIN clients. I would have hoped that by

this time it would have been much higher than that, but the influx of

all these people has caused the backlog, and some of them don't have

court orders; so we have to determine that first.

By agreement, and in order to facilitate other House business, I

move the committee rise, report progress and ask leave to sit again

later today.

The House resumed; Mr. Pelton in the chair.

The committee, having reported progress, was granted leave to sit again.

HON. MR. STRACHAN: I call second reading of Bill 55.

VANCOUVER ISLAND

NATURAL GAS PIPELINE ACT

HON. MR. DAVIS: Mr. Speaker, I made my introductory remarks

on the bill the day before yesterday, so it's now the opposition's

opportunity to comment on second reading.

[3:45]

MS. EDWARDS: I want to begin my discussion of this bill by

laying out very clearly that New Democrats on this side of the House

support the goal of ensuring that Vancouver Island residents have

natural gas. Definitely we believe that as much as possible we should

have equal access to this kind of clean and — until now, at least —

relatively inexpensive fuel, In fact, it has prevailed across the

province that that is approximately what has happened. There are very

few communities in British Columbia that do not have natural gas, and

the ones which do not are very small. One of the outstanding exceptions

is the community of Revelstoke, and there are some small communities

which do not.

It has been a matter for senior governments that natural gas is a

fuel to which most people should have, and would like to have, access.

Therefore there have been a number of programs for seeing that that

happens. Over the years the federal government has subsidized programs

— the provincial government has done some subsidizing of programs —

which allow natural gas to residents throughout the province on a

relatively equitable basis. One has to recognize, however, that within

the broad general

[ Page 8736 ]

objective of allowing everyone access to natural gas, there is no

reason for us to put forward a project that is not justifiable in both

economic and environmental terms. I submit that Bill 55 meets neither

of these tests of benefit.

On the environmental questions, I would like to go back to the

Utilities Commission, which wrote its report on the Pacific Coast

Energy Corp. proposal for building the pipeline. When it had completed

its examination of the environmental issues, it expressed its

dissatisfaction. It said that PCEC did not offer any expert testimony

that construction of the pipeline would not harm the water quality. It

objected to the fact that PCEC was — and I quote — "somewhat vague in

regard to the nature and extent of the information that would be

gathered and incorporated Into an environmental protection plan." It

also objected to the lack of final plans in many important

environmental areas.

Before the Utilities Commission hearing into the environment, there

were two major studies that were not available to the commission. There

was an environment assessment report prepared by the provincial

Ministry of Environment and one completed by the consulting company for

PCEC. Neither of those reports went to the commission, although the

commission said in its report that "it is vital for an environmental

protection plan" — an EPP — "to be drafted prior to construction of the

line." It said this draft should be ready and submitted by April 30 to

do field surveys, construction and planning, mitigation plans,

compensation plans for marine beachheads and blasting programs. It is

not clear whether those concerns have been met. Certainly those

requirements were not met before such time as the Utilities Commission

reported and the original protect plan was allowed by the minister to

go ahead — the provisional energy product certificate.

There were some specific concerns expressed by a committee which

took environmental resource and land use members of both senior

governments, who had a working committee. Their broad general feeling

was that there is a lack of information or understanding in the

application regarding fisheries, wildlife, terrain geology, watershed

hydrology and outdoor recreation, particularly when dealing with the

Port Alberni–Campbell River and the mainland sections.

That situation was very clear. There simply was not enough

information to make a reasonable decision on the effect on the

environment. They made some more rather specific comments that were

fitted into the general statement I have just quoted. They said that

they had these concerns about the application of PCEC for the building

of the pipeline.

They were concerned about the use of the Hydro right-of-way for the

gas pipeline on the Island and said that use of that right-of-way might

exacerbate existing environmental problems in the rights-of-way, noting

that when Hydro lines were built originally on the Island, there was

not a great deal of environmental review given to the project. In fact,

there was no indication that those rights-of-way had been re-examined

for additional impact.

They said the general level of assessment for Vancouver Island

streams was not as detailed as for many of the mainland streams, and in

particular some small tributaries weren't noted at all.

They said that "the potential impacts on outdoor recreation were

very poorly stated," and that there was no description of what the

potential impacts were or the nature of the impact on outdoor

recreation and visual resources.

They said very clearly that much more information is required on the

potential fisheries impact of construction of the pipeline and

associated protection works where major encroachment on the floodplain

is planned, and serious consideration should be given to avoiding such

locations.

That wasn't all they said, Mr. Speaker. They had many concerns, and

many of these questions remain unanswered. The only problem that was

brought forward and which has been addressed was the problem of whether

or not to route the pipeline through the Coquitlam watershed. The only

reason that concern was addressed was that the members of the Greater

Vancouver Water District carry a great deal of political clout and had

a great deal of political knowledge about how to lobby and get what

they wanted, and they did. They have a study that currently is going

ahead, or perhaps it has reported by now. That was the only issue that

was publicly responded to by the minister, so we could see that there

was a study and an extensive response to the concerns that were

expressed.

If we move on to some of the economic questions, we also have to

note that the Utilities Commission had some problems in trying to

determine what the economic impacts would be. First of all, the

commission had to delay its hearings on economic impact, because

various members who would be giving testimony were not ready. Some of

the information they had been given was not adequate; they had to send

it back to see that it was made adequate.

After a number of delays, in order to get as much information as

they could possibly get, they noted that there were significant risks

to the provincial government. Most notably, the commission said: "It is

quite clear that any increase in producer prices negotiated in future

would flow directly to the account of the provincial government to be

financed under the rate stabilization facility. Consequently, the full

risk of negotiating higher prices of natural gas will be borne by the

government, not PCEC. This risk to the government cannot be overstated."

I think it's very difficult to get around this particular statement

by the Utilities Commission, which was a measured, considered

statement, and quite precise in saying that the risk is extremely

large. The risk to the government cannot be overstated.

The Utilities Commission also recommended government participation

in supply negotiations after the granting of a conditional energy

project certificate, and the very fact that the commission had to recommend

[ Page 8737 ]

a process, instead of dealing with the substantive issue,

indicates another of the dangers of going too fast into a project of

such great complexity.

The commission said it was "dissatisfied with the performance of

PCEC with respect to gas supply. The commission believes that any

activity by PCEC to negotiate natural gas prices after the issuance of

a conditional EPC should require participation on behalf of the

provincial government."

The commission again noted that "there exists a very large business

risk related to the future of oil prices," and observed that

assumptions about the course of natural gas prices vis--vis oil

prices.... This is important, because the rate stabilization fund in

the bill will tie the price of gas to the price of oil. The commission

said the assumptions made by PCEC in relation to the course of natural

gas prices and what it expected them to do in the future significantly

differed from those of the Independent Petroleum Association of Canada.

The commission said: "It should be noted that the applicant's price

assumptions are exactly contrary to the evidence provided by IPAC, the

only witnesses who could be described as independent on the issue of

supply and pricing."

The commission clearly pointed out that the Independent Petroleum

Association suggested gas prices would go up in the very near future to

around the $3 level and that that was — to be very general about it —

at least doubling the prices that were predicted by the proponent.

Because Energy, Mines and Petroleum Resources from the outset

assured the pulp mills on the Island — who are the major industrial

customers — that there would be no net cost increases to them as a

result of converting to natural gas, therefore the risk to the rate

stabilization fund is major. The rate stabilization fund under this

bill will last for 20 years and is uncapped. The Utilities Commission

calculated the fund could cost the taxpayers up to $270 million The

question has to be: are British Columbians willing to add another $270

million to the project? Are they willing to pay that amount, which is

$20 million more than the projected cost of the pipeline itself? Are

they willing to more than double the risk to the provincial government

on the amount of money that originally initiated the whole project, the

amount the federal government offered?

The Independent Petroleum Association again said in its evidence to

the commission that the pipeline project outlined in the application

seemed to need a higher level of subsidy than the grants and loans

proposed by the federal and provincial government. This whole situation

led to a feeling of doubt on the part of many of the witnesses to the

commission hearing.

The things that seemed to be sure, the things that were said to be vital, were

a number of deadlines for one thing. There was the deadline for the cost of

the pipe. There was another vital thing. It was said that the pipe-laying contract

had to be completed by May 4 if the project were to be completed within cost

as proposed, and it was pointed out that 69 percent of the pipeline cost would

depend on.... That amount — 69 percent of the cost of the pipeline — would be

$271 million, and if in fact there is some doubt about that amount of the project,

it seems to me that again we have a situation where the public is wondering

what is going on.

We have a statement by customers who gave evidence at the commission

hearing, and they said it was vital — in fact, the commission said it

was vital — that industrial and residential customers deal directly

with PCEC rather than producers. That assurance has yet to be given. We

don't know if that is there. It is said that it is vital, but it hasn't

happened.

The Utilities Commission overall, talking about this uncertainty,

expressed its particular concern because it was required to conduct its

hearings as quickly as possible. Its comment on that was: "The

commission has been obliged to proceed under less than ideal

conditions."

[4:00]

It found itself in a catch-22 situation. They needed to know the

price they were going to get from the producers before they could sign

a contract with the consumers. Without knowing that price, they

couldn't sign a contract with government, and it went round and round.

The agreement had to be signed and the approval given before one would

know the other. It was a very complex and difficult case, and none of

this uncertainty, none of the going around what was said to be required

for this, vital for that or needed for that is solved In Bill 55.

The question remains: what happens if costs come out to be more than

they were estimated? Many of the people worried at the commission

hearings — industrial users, producers, utilities and resident users

and taxpayers — all believed that if the costs exceeded the estimates,

they could end up paying it. It's true. Somebody would have to end up

paying an excessive cost.

The commission did not agree with the PCEC suggestion that any

increased cost prudently incurred by the applicant should be carried

over to the rate base, but that suggestion was made. That was the one

that got the consumers concerned, because if it was carried over to the

rate base, then of course the consumers pay for it. If that's not the

case, then it's quite probable that the taxpayers will pay for it under

the rate stabilization fund.

What happens if the route has to be diverted around the Coquitlam

watershed? There is a great deal of doubt about how the company would

deal with any increase in costs mandated by the commission or the

minister, for instance, if they were forced to change their route.

Because the minister, by this bill, commits the taxpayers to an

open-ended rate stabilization fund which could cost more than the total

cost of the pipeline, we have to express our rejection of that fund and

of the proposal the minister has made. If you put together the specific

firm amounts that are included in this bill — $25 million and $55

million — and then the projections of what could happen under the rate

stabilization fund, the total cost of the

[ Page 8738 ]

pipeline to the provincial treasury could range anywhere from $60

million under the most optimistic scenario put forward by the Utilities

Commission — and let's smile for a moment, because we're going to get

to the least optimistic case in a moment — to the worst case of $340

million.

If we look at the history of megaprojects in this province — such as

the Coquihalla project and northeast coal — and we look at how they

have come in, what they cost and ultimately what happens to

megaprojects, I don't think we can be very optimistic that we're going

to get away with any least-cost scenario. In fact, we nearly always

seem to end up with the greatest-cost scenario. That, as I have just

said, would be $340 million in the commission's idea of the worst case,

when they were looking at figures that were not firm.

Because in this bill the Lieutenant-Governor-in-Council keeps to

itself the power to exempt the proponent and local distribution

utilities from the regulation of the Utilities Commission or any action

under the Utilities Commission Act or the Gas Utility Act, we have to

reject that idea. What the minister has done Is reject regulation in

favour of government decree. That is not adequate. It is not

appropriate that the Lieutenant-Governor-in-Council can go around

environmental concerns. I wouldn't be so firm in discussing this

particular issue, Mr. Speaker, if it were not that the minister has put into this bill more power than was needed.

Under other bills, there are powers to exempt and to lay out rules

for a commission. This bill repeats those powers and in fact, by

implication, may extend those powers to ensure that the proponent and

the utility companies involved can be exempted from the requirements of

existing legislation that would control those companies under our

arm's-length regulation, and that is the way we have considered it to

be adequate In this province until now.

Bill 55 is an open invitation to government to doubly spend the

federal grant and loan that initiated the project, and we don't believe

the people of British Columbia are ready to pay that price for this

project. This project is ultimately a doubtful project. It is

economically shaky. It is not going to deliver the kind of things that

the minister has said he wants it to deliver.

It seems to us that we have to be open to other ideas. There are

many of them around. For example, It has just been published in a

Calgary newspaper recently that coal-seam gas technology has improved

to the point that it could provide the natural gas on Vancouver Island

that may not currently be there, under technology, but is coming. There

is a company that was exploring and testing its methods, and felt very

optimistic about the seams on Vancouver Island, and they, of course,

had the idea that the best coal-seams in the world are In this area,

across the Juan de Fuca Strait and here on Vancouver Island. They were

doing some exploration work, some testing work. If their production was

going to go the way it has gone in the state of Washington, they were

looking to do more work. Their exploration, their testing and their

attempt to find out what they could about a market for Vancouver Island

ended when the announcement of the Vancouver Island natural gas

pipeline came on line.

It's possible that this is not going to be the answer for Vancouver

Island energy consumers, but it's possible that it is, Mr. Speaker. It

seems to me that under the circumstances, when you look at Bill 55 and

the way it lays out the cost that the people of British Columbia would

have to bear, when we could do a better job by a better use of

electricity and more extensive use of electricity than is already being

brought to this Island, by more effective emission controls from pulp

mills, which could work very much more effectively than the simple

emission controls that were introduced by the Minister of Environment

(Hon. Mr. Strachan) to pulp mills in a climate of non-enforcement of

regulations.... He brought in another regulation for air emissions,

when almost every pulp mill in British Columbia does not meet its

requirements for air emission standards. It seems to us that there is a

great deal of latitude for more work to be done in that area, rather

than simply the one move that the Ministry of Environment made in an

area that is not usually enforced.

We in this province don't seem to be ready to take adequate measures

to improve the safety of marine oil transportation, and therefore when

the minister defends this project — and it certainly needs defence on

some grounds other than what's in the bill — on the basis of keeping

oil barges away from British Columbia, it makes us wonder why the

minister doesn't insist that there be better measures for the safety of

transportation of marine oil in the province. The problems that the

minister says this pipeline will solve could be solved in other ways.

The costs that the pipeline would present to British Columbians under

Bill 55 are simply too great for the people to want to accept. The

environmental dangers have not been calculated, and there's no

indication by this bill that they will be calculated, or that in fact

if they are calculated and laid out, they will be followed.

The bill gives extra power to the Lieutenant-Governor-in-Council to

do whatever it chooses, to go around other legislation, to do what it

likes to get this pipeline through, which has been exactly the

direction that it has gone ever since we got the promise of the money.

There has not been a reasonable examination of whether or not it should

go; it has been a simple process of going through step one, then step

two; and if we're not through step two, we'll go to step four, and then

we'll go back to step two and pretend that we didn't, and say that we

know now how we might do step three if we had time to do it.

Mr. Speaker, the project has gone too fast. It has not assured

anyone in the province that it is going to be safe or that it is going

to be reasonably cost-effective. Those facts being so, we have to say

very clearly and very strongly that Bill 55 does not address the

concerns laid out by the minister or the concerns that we hold in the

New Democratic Party, or the concerns of the people of British Columbia.

[ Page 8739 ]

MR. CLARK: The member for Kootenay has done an excellent job

of canvassing the issues here, and I don't wish to repeat them. I

thought I might just go through the economics of the project, because

it really is an economically stupid project. I know the minister is an

economist, so I would be interested in some remarks in that regard.

There clearly hasn't been enough scrutiny, in my view. The BCUC said:

"...obliged to proceed under less-than-ideal conditions." I think

that's an understatement, as these quasi-judicial bodies are wont to

make.

The hearings clearly demonstrated that the pipeline is not economic

without significant subsidies. The pipeline company is owned by the

private sector, and it gets a guaranteed rate of return. The public

sector puts up most of the money, takes most of the risk, and receives

no return on its investment. The total capital costs of the project

are, as I understand it: distribution costs, $140 million; conversion

costs, $95 million; and the actual pipeline construction, $250 million

— for a total capital cost of $485 million.

With respect to the distribution costs of $140 million, those are

paid by the private sector, but they are recovered entirely from

consumers, plus a guaranteed rate of return. This is an interesting

perversion of market economics: a utility that spends money makes a

rate of return on whatever it spends. It's a kind of incentive to spend

money, which is why — and I know the minister would agree with me — we

get gold-plating on utilities. It's why, for that matter, Milton

Friedman supports public ownership over government-regulated private

monopolies. Now it's true that Milton Friedman supports private

ownership with no regulations, but given a choice between state

ownership and private ownership that's regulated, he chooses state

ownership. The reason is this incentive to increase costs because they

get a rate of return. Anyway, the distribution costs of $140 million

are fully recovered by the consumers, plus a guaranteed rate of return.

The conversion costs are $95 million, of which $55 million is paid

in grants by the province. So there is a direct subsidy of $55 million.

The remaining $40 million is paid by new gas consumers; again, those

are individuals. The pipeline itself is $250 million; $150 million

comes from the federal government — $100 million in cash, $50 million

in an interest-free loan — and $25 million comes from the province in

the form of an interest-free loan.

Of the remaining $75 million, the company will borrow $50 million

and put in $25 million in equity. Members should be aware that the

private pipeline company puts $25 million into a $250 million project;

they put in 10 percent of the cost and get 100 percent of any profit.

As a matter of fact, they get a regulated rate of return on the entire

$250 million capital cost, even though they have only put in $25

million of their own money. So the subsidies are quite significant, as

you can see, on the capital side.

[4:15]

However, the most risk, and possibly the largest subsidy from the

province, comes in the form of the open-ended, uncapped rate

stabilization fund that the member for Kootenay talked about. If the

project suffers any losses after the cost of gas, after the return to

the private pipeline company and after the recovery of federal loans,

the province picks up the difference.

The province will recover contributions to the rate stabilization

fund — without interest, by the way — only if the project becomes

profitable in later years. There is a very large risk, and to quantify

that risk is not that easy. It really depends on the gap between the

price of gas and oil. If the gap narrows — and I would say that most

experts believe the gap between gas and oil will narrow; in other

words, gas will become more expensive relative to oil — then the

subsidy will be huge.

The project losses will be large, and BCUC has a variety of

estimates. The most pessimistic scenario — and I agree it's the most

pessimistic, but one which I think is possible — says that the province

will have to pay $270 million to the rate stabilization fund by the

year 2007. Members should listen to what the BCUC said: "The

uncertainty of gas prices at this time and the risk of future

fluctuations in oil prices creates a significant financial exposure for

the provincial government which cannot be overemphasized." The province

could be liable for subsidies, if you include the capital and the rate

stabilization fund, of up to $350 million. The federal government has

committed itself to $150 million, for a total subsidy — although some

of it's in interest-free loans — of $500 million.

Now I don't know how many people live on Vancouver Island and in

Powell River, but I suspect it's about 500,000. So the subsidy,

crudely, could amount to about $1,000 for every man, woman and child in

the region. It's rather significant. One can say that the public should

subsidize projects of this nature — and maybe they should — for the

public interest or for other social goals. But we should ask ourselves

what people get out of it.

People think they are going to get cheap gas. I think most people on

the Island say: "We would like cheap gas." What is the stated intention

of the government? The stated intention is that for the first two years

it's 15 percent below oil, and for the years thereafter it's 10 percent

below oil. Most of the capital cost subsidy, by the way, goes to the

large pulp mills. They're the ones that need to go on gas desperately.

So there isn't a lot of subsidy for conversion for the average

resident. Most of the money that's on subsidy goes to the large

industrials.

What kind of price does the consumer get after this massive — and it

can only be described as massive — government subsidy? As I said, it's

about 15 percent below oil for the first two years. People should know

as well that they're not therefore protected, they're not insulated,

from rapidly rising oil prices. In fact, they are linked to rapidly

rising oil prices under this scheme. The E-Plus program — the

commendable energy program that the minister introduced a few years ago

— provides the price of electricity at 40 percent below the price of

oil. That project is phased out in order to make gas competitive. It's

a great irony. Those who are on electricity on

[ Page 8740 ]

the E-Plus program and pay 40 percent below oil will have to pay at

least part of the cost to convert to gas and then have higher energy

costs, that being 10 or 15 percent below the price of oil. There's no

insulation from the rapid price rise. So we're dealing with massive

subsidies and very little benefit, if the truth be known, to

residential consumers on the Island.

In addition, the bill does not say 10 to 15 percent. The bill gives

the government the power to dictate the gas rates to the Utilities

Commission. While the minister says 15 percent, and the government says

15 percent below oil for the first two years and 10 percent thereafter,

the bill allows the government to direct the Utilities Commissioner to

charge a different price. There is no guarantee in the bill that even

that modest price break relative to oil will continue under this bill,

because by order-in-council the government can change it.

I think all members should be aware of the potential massive

subsidies for this deal and the rather dubious benefits in terms of the

cost relative to the other alternatives, such as the member for

Kootenay has described very clearly. Electricity, by the way, is, of

course, cleaner than natural gas. We could move in the direction of

pulp mill standards being increased and others on the environmental

side. It's a very dubious economic project.

One last point. Some promising technology is being developed in

California and elsewhere. It's not so much technology, but there is the

possibility of finding natural gas on Vancouver Island, particularly

connected with old coal deposits. I understand there's been some

success finding gas by drilling in areas that have a great abundance of

coal, which as we all know has been on Vancouver Island in several

regions. I understand also that a private company from California was

hired by the government — probably under this minister — to study

whether or not there is a possibility of gas being found on the Island.

We didn't hear any more of that study. I suspect — and I'm led to

believe — that the study suggested there was room for some very

cautious optimism, but at least for continued exploration of the idea.

It's clear to me that the last thing the government would want now

is to find gas on Vancouver Island, given the commitment to massive

subsidies for a pipeline that are contained in this bill. Surely that's

an alternative which in a rational way the government should be

pursuing, at least in advance of committing ourselves to the kind of

financial exposure that exists In this bill.

I haven't spoken at length. I don't plan to. I just think all

members should be aware of the kinds of subsidies this project

contemplates and requires and that this government has committed itself

to, and the rather dubious, I think, benefits when one looks at the

price differential contemplated in this bill.

DEPUTY SPEAKER: Members are advised that pursuant to standing orders, the minister closes debate.

HON. MR. DAVIS: It's clear that the New Democratic Party

doesn't like the Vancouver Island gas pipeline project. They claim that

for economic reasons they oppose it, certainly for financial reasons

they oppose it, and even for environmental reasons they oppose it.

The hon. members opposite who have spoken have been assiduous.

They've combed through a fair amount of literature. They've undoubtedly

underlined every negative comment they could find, and they've recited

those negative comments to the House. They haven't, of course, given

any of the positive side of the project. I suppose that's indicative of

their psychological approach to development of any kind. They wouldn't

be building a pipeline to Vancouver Island today. They wouldn't be

building one for several decades. They have a pessimistic view, for

example, of world oil prices relative to gas prices. They assume that

oil will be cheaper than gas into the indefinite future. The world oil

price, as we all know, is substantially governed by OPEC, and OPEC has

formed a cartel. Those countries will, in their own interest, keep the

oil price roughly where it is today for some time. They don't want it

to rise unduly, because they don't want to bring in new production in

other parts of the world.

Gas prices tend to fall relative to oil prices, essentially because

natural gas is transported and distributed by regulated utilities. Once

the regulated utilities have made their investment in pipe and pumping

equipment, their rate bases are established. They depreciate over time,

those companies charge less and less for transportation and

distribution, and the price of gas falls essentially because it's a

regulated commodity — not because it's a free-market commodity; it's

regulated. The only free market that exists is at the producing end, at

the wells themselves. We've seen the price of natural gas at the wells

fall dramatically simply because the world oil price fell. They will

tend to go up if the world oil price goes up.

I contend that now is the right time to buy gas — since gas prices

are depressed at the wellhead — for a pipeline to Vancouver Island.

That gas has been bought. It has been bought by the pipeline company

for the small users; it has been bought by the pulp mills for their own

use. They are buying gas at the right time in terms of price.

But over to the B.C. Utilities Commission and its hearing into this

project. On the environmental side, the Utilities Commission concluded,

and I wish hon. members would listen to this: "The commission is

satisfied that the long-term environmental benefits resulting from

extension of gas service to Vancouver Island can be achieved with only

minor short-term environmental impacts from pipeline construction." In

other words, it's environmentally advantageous, clearly by a

substantial margin. That's what the Utilities Commission said. However,

hon. members opposite have implied that the commission said the

opposite.

There are two obvious benefits. One is that natural gas is a pure fuel, pure in the sense that it doesn't

[ Page 8741 ]

contain extraneous substances like sulphur or metals. It's purified

in the fields at its source; it's pure methane. Wherever it's utilized,

there are no spinoff products such as acid rain. Making natural gas

available on the Sunshine Coast and on Vancouver Island makes a

pollution-free fuel available in all the communities along the

pipeline. It makes a pollution-free fuel available for roughly half a

million British Columbians who don't have the choice of natural gas;

they have to rely on oil principally, or electricity, which is far more

expensive than natural gas for heating purposes, or waste wood. So it

brings a benefit.

Ministry of Environment officials have calculated that the acid rain

deposition from the pulp mills around the Strait of Georgia currently

is of the order of 8,000 to 10,000 tonnes a year. The pulp mills say

that's not right: some of the sulphur is absorbed in processes, roughly

half as much goes up the stack, and it's only 4,000 tonnes of acid rain

a year falling on the Strait of Georgia and the lower mainland. That

will be eliminated when natural gas is available to the mills, so

immediately there is that saving to the environment. There is a saving

to the environment in communities generally where small users will use

a pollution-free fuel instead of oil, which tends to be a greater

polluter, or wood wastes, which pollute in their own particular way.

The environmental balance, in the big view, is overwhelmingly in

favour of natural gas and overwhelmingly in favour of building a

pipeline now rather than a decade or two from now.

On the economic side, the commission looked at various scenarios.

They looked at the best-case scenario, which wasn't quoted by members

opposite; they looked at the worst-case scenario; they looked at

middle-case scenarios. Essentially what they used in order to develop

the worst-case scenario was this: the world oil price would fall to

less than $10 a barrel and stay there for 20 years. That's the largest

single exposure the province has: the world oil price. We know that

it's around $20 today. We know also that if it were to stay at $20

through the next ten years, there would be an exposure through the rate

stabilization fund of the order of $10 million, not $50 million or $100

million, as suggested. No, a total of $10 million, and the

stabilization fund would first be spent out and then recovered after

the pipeline operation was in the black. The stabilization fund is a

fund which in concept is replenished. The only argument is over how

many years it is replenished, including interest.

[4:30]

The suppositions which could be harmful: the world oil price falling

dramatically; the price of gas in the field rising dramatically; the

pipeline costing considerably more than has been estimated, and so on.

Regarding the pipeline, the firm bids are all in from the pipe

companies and equipment companies. The cost of the line, including a

very high estimate for the underwater crossing, is of the order of $260

million, which is very close to the figure which the Utilities

Commission said would be obtainable. Those figures are now about a

month old; they're firm bids to the proponent. So there's not likely to

be a material cost overrun in building the line.

The price of gas in the field is now established, because the gas

required for small users has been bought by the pipeline — roughly a

third of the required amount. The other two-thirds has been bought by

the pulp mills directly. The pulp mills are guaranteed that the price

they will pay for gas will never exceed the competitive oil price. They

believe they can better that by buying in the field and paying the

tariffs of Westcoast Transmission and the new pipeline to Vancouver

Island.

The Utilities Commission named several deficiencies, all but one of

which have now been met. One, they said the gas supply had not been

contracted. That was in early May. The gas supply has now been

contracted, They said that that was a condition that had to be met

before a certificate could be issued. They said that the mills had to

be on line. The mills are now on line. They said that the capital cost

of the line should be determined through firm bids. The firm bids have

been received, and they are in the right order of magnitude. They said

that the charge for wheeling gas across the lower mainland system

should be negotiated. It has been negotiated. Finally, they said that

an acceptable route.... They recommended the Coquitlam watershed, but

said the Coquitlam watershed controversy should be revisited. That is

presently being examined by Mr. MacKay, former manager of the Greater

Vancouver Water District; and within the next ten days he will be

reporting out his recommendations as to that first portion of the

route: whether or not the watershed or an alternative location is

acceptable.

Substantially all — and I'll say with the possible exception of the

Coquitlam watershed — of the conditions laid down by the Utilities

Commission as conditions precedent to the issuance of an energy project

certificate have been met. It's my expectation that that certificate

will be issued sometime in August.

When hon. members question the economics of the line, I have to say

upfront, as I've said all along, that it needs a substantial subsidy.

That subsidy has been provided by the federal government in the order

of a $100 million outright grant and $50 million interest-free money

available until the project begins to pay its own way. That's the

nature of the subsidy. The province lends $25 million to be repaid when

the project is in the black. The province, furthermore, grants outright

some $55 million for the conversion of pulp mills and small-user

equipment in the municipalities. So the province's direct exposure is

$55 million. It includes a loan of $25 million, ultimately to be

repaid. And it includes this price stabilization fund, which may at its

maximum drawdown run anywhere from $10 to $50 million, but in the

fullness of time must be repaid.

Hon. members, I think rightly, given that amount of information, can

continue to be skeptical, but I can assure them that we've been around

these numbers many times with the federal government, and the federal

people have been quite concerned about the

[ Page 8742 ]

payback of their $50 million loan. They had to be convinced that the

economics would at least enable the $50 million to be paid back to

Ottawa, so they as well as Victoria have combed through this project

many times. They've looked at the various assumptions, looked at the

risks and concluded that the loan elements will be paid back within the

decade — I believe sooner rather than later. Nevertheless, the federal

analysts have been at work on the project as well.

The hon. members opposite have been concerned about the rate base of

this project, for rate-making purposes. Certainly the mills have been

very concerned, because they'll have to pay the rates for

transportation, as will the distributors. The hon. member suggests that

the pipeline company will put up only $25 million of equity in a $250

million project. Well, the rate base will not include the $100 million

federal grant, so that brings it down to $150 million, and the loans

which don't pay interest for some years, both federal and provincial,

bring it down further, so the rate base is, I'll say, of the order of

$125 million.

In any case, the pipeline and the distributing companies will be

regulated utilities. They will have to conform to the Utilities

Commission requirements of debt-equity ratios. They will have to put

more equity into the project if, say, a 70-30 debt-equity relationship

is deemed to be the appropriate one. The pipeline company will be

regulated at arm's length from the government, and the pipeline company

will have to bend its best efforts to flow all the gas that's been

contracted in order to make a reasonable profit on its investment.

I must say that there are a couple of benefits from the line to the

province. One is that when natural gas begins to flow, the price paid

for the Victoria gas distribution system will jump by some $10 million.

That's a $10 million benefit to B.C. Hydro, and through Hydro to the

provincial treasury. When gas flows, royalties will be paid on the

production, and sales taxes, income taxes and so on will also be paid

both on construction materials and on other elements of the projects,

both long-distance and local distribution.

The provincial numbers indicate that the present value of royalties,

sales taxes, income taxes and so on, and the sale of Victoria gas, is

of the order of $100 million. Again, the province's direct exposure is

$55 million for conversions, and some interest forgone on a $25 million

loan. On balance, the province should not be in the red on this

project; it should come out ahead by $20 million or $30 million, in

present value terms.

The federal side has not been totally unaware of these numbers and

has consistently argued that the province hasn't been holding up its

end on the project. We have argued that we have taken the risk on the

rate stabilization fund and the conversions, and that putting the

project together was enough risk for the province to assume.

[Mr. Speaker in the chair.]

I am arguing, Mr. Speaker, and I am about to conclude, that this

project is environmentally sound. I am also arguing that, given the

federal grant of $100 million and the federal interest-free loan of $50

million, the provincial government will not be out of pocket; In fact

it may be in-pocket by some tens of millions of dollars. Therefore I

have no hesitation in recommending the project to the people of the

province. I move second reading, Mr. Speaker.

Motion approved.

Bill 55, Vancouver Island Natural Gas Pipeline Act, read a second

time and referred to a Committee of the Whole House for consideration

later today.

HON. MR. VANT: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF

SOCIAL SERVICES AND HOUSING

On vote 64: minister's office, $301,553 (continued).

MS. SMALLWOOD: I would like to cover an area that I'm very

concerned about, and I hope the minister has some answers. This is the

area of foster care in this province. Let me lay out some of my

understanding of the situation and the implications that I have been

apprised of.

In 1988 the federal government passed an amendment closing a

loophole in the taxation act. That loophole allowed people receiving a

fee from Social Services to be non-taxable, and in closing that

loophole, they have, I believe, caught foster parents in an attempt to

stop dentists and other practitioners from providing service and not

declaring it on their income tax. It seems like a fairly simple a