2006 Legislative Session: Second Session, 38th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MAY 1, 2006

Afternoon Sitting

Volume 10, Number 4

CONTENTS

Routine Proceedings

Page

Introductions by Members

Tributes

Phyllis Hards

C. Trevena

Peter Affleck

S. Hawkins

Introductions by Members

Statements (Standing Order 25 B )

San Patrignano community for addiction

treatment

L. Mayencourt

B.C. School Trustees Association

J. Horgan

Human early learning partnership

J. McIntyre

Fire at Sikh temple in Williams Lake

C. Wyse

Asian Heritage Month

R. Lee

Encounters with Canada program

C. Trevena

Oral Questions

Softwood lumber agreement

M. Farnworth

Hon. R.

Coleman

B. Simpson

Appointment of John Tomlinson to

Agricultural Land Commission

B. Ralston

Hon. P. Bell

M. Karagianis

R. Fleming

B.C. Ferries contract for service to

northern communities

N. Simons

Hon. K. Falcon

Ferry service to northern communities

and fare increase

C. Trevena

Hon. K. Falcon

Impact of ferry sinking on Hartley Bay

shellfish industry

S. Simpson

Hon. B. Penner

Petitions

H. Bains

C. Wyse

Committee of Supply

Estimates: Ministry of Forests and

Range and Minister Responsible for Housing

Hon. R.

Coleman

A. Dix

B. Simpson

Tabling Documents

Office of the Auditor General, report

No. 1, 2006-2007, Strengthening Public Accountability: A Journey on a

Road that Never Ends

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Community

Services and Minister Responsible for Seniors' and Women's Issues

(continued)

Hon. I. Chong

D. Thorne

B. Ralston

J. Kwan

M. Farnworth

H. Lali

J. Horgan

Estimates: Ministry of Tourism, Sport

and the Arts (continued)

N. Simons

Hon. O. Ilich

C. Wyse

M. Karagianis

R. Fleming

G. Gentner

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MONDAY, MAY 1, 2006

The House met at 2:03 p.m.

Introductions by Members

Hon. S. Hagen: I'm very fortunate that I have three wonderful nieces, and today one of them is visiting us in the House, from White Rock. I ask the House to help me welcome Dr. Dina McConnell and her two daughters Anya and Grace.

Tributes

PHYLLIS HARDS

C. Trevena: On Friday a tragic incident occurred at Campbell River Hospital. Phyllis Hards, a 78-year-old volunteer, died after an attack near the Sunshine Gift Shop, which she managed.

Phyllis was known and admired and loved throughout the community. She'd volunteered with the ladies auxiliary at the hospital for 25 years. Just last December she was given an award for contributing more than 10,000 hours of voluntary service. In 2002 Phyllis was named Campbell River senior of the year. She was tireless and dedicated, working seven days a week. She was an inspiration to her fellow volunteers, friends and those who came to the hospital.

I would ask that the House pass its sympathies to her family and to her friends.

PETER AFFLECK

S. Hawkins: It is with great sadness that I inform the House of the passing of a dear friend and colleague. Peter Affleck passed away early this morning, following a massive heart attack that he suffered on Wednesday. He is survived by Anne and his four kids.

Many of you will know Peter because he was in the forestry industry for over 30 years. He was a tremendous force in shaping forestry policy in this province. He was in Kelowna since 1994. He was a minor hockey coach, he was a volunteer for all kinds of things in the community, and he was involved in many charitable functions, including helping me out with a golf tournament I do every year for cancer care.

Mr. Speaker, I want the family to know that our thoughts and prayers are with them.

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Introductions by Members

H. Bains: In the House today are members of Surrey Manufactured Home Owners Association and their representatives: Doreen Mortensen, president; Louise Nicholson, treasurer; Ed Barton, director; and Glen

Reckseidler, director. Along with them is a woman who keeps me looking good in the community, my constituency assistant, Emily Zimmerman. Would the House please join me in welcoming them.

Hon. P. Bell: I had the honour today of presenting the first minister's award of excellence to Steve Carr, who is the director with the integrated land management bureau in our Kamloops office. Steve has been with government for quite some time and has been an incredibly dedicated employee who has delivered on many services for all constituents of members of both sides of the House. I would ask that the entire House please help me in congratulating Steve for all of his good work.

D. Routley: Joining us in the precinct today are several members of the Active Manufactured Home Owners Association: Joyce Klein, treasurer; Alex Ross, president; Shirley Stirret, director; Beryl Adkins, member; and Derek Adkins, member. Would the House please welcome these fine folks to the precinct.

S. Fraser: Visiting the precinct today is one of my constituents, Wolfgang Zimmerman. He is no relation, I think, to the other Zimmerman. Wolfgang is the executive director of the National Institute of Disability Management and Research. He is working tirelessly to develop the first international university on workplace health sciences as a global centre for excellence. He is working across the spectrum, across different sectors and across this House with members from both sides to make that a reality. Would you please help me make him feel welcome.

D. Routley: Could the House please help me make welcome Jim Bennett of the B.C. Real Estate Association. He is visiting us in the precinct today.

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Statements

(Standing Order 25

B) SAN PATRIGNANO COMMUNITY

FOR ADDICTION TREATMENT

L. Mayencourt: I rise today to speak about a program that I visited in Italy. Italy, like many other nations, has experienced an increase in drug use during the past decade. Vincenzo Muccioli, founder of the San Patrignano community, understands the deeply rooted causes of drug addiction as an escape from reality often beginning in adolescence due to the absence of relationships with families and peers, as well as feelings of isolation and not belonging. San Patrignano is an intentional community. It is comprised of 2,200 recovering addicts. Residents live there voluntarily, within a walled community. They stay there three to five years.

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The mission of San Patrignano is vast. The organization aims to welcome, support and assist people with their healing journey. It does so free of charge and without discrimination. As I said, in December I had the opportunity to visit this community and see first hand how these programs work. At San Patrignano they have a winery. They have a furniture factory, racehorses, a cheese factory, a dairy, a vegetable farm, restaurants, the creation of tapestries and handmade wallpaper.

In all areas of this community, the attention to detail and perfection has made San Patrignano a brand that all Italians know means top quality. It is that social enterprise, which those members engage in, that pays for the community.

I was very touched by the way everyone worked together there and the camaraderie that we saw. In a spirit of self-banishment, all residents — who are all recovering addicts — control the activities of the communities through the goods and services and use professional training as an educational tool aimed at the complete social rehabilitation of its residents.

In the words of Vincenzo Muccioli: "San Patrignano is a community for the living, where you can restart your life after years spent as a social outcast. It is a community against social marginalization."

B.C. SCHOOL TRUSTEES ASSOCIATION

J. Horgan: It's a pleasure to rise today and inform this House of the recently concluded annual general meeting of the B.C. School Trustees Association, held in the warm and hospitable city of Prince George over the weekend. I had the pleasure of being at the event with the Leader of the Official Opposition, and it was a very enjoyable couple of days of stimulating debate, resolutions and some fantastic entertainment from the D.P. Todd Secondary stage band on the night of the annual reception.

It's that reception that brings me to my feet today, because at the annual general meeting the BCSTA recognized 22 members for long service and life membership. I'd like to read those names and those districts. Please withhold your applause until I've concluded.

Lyn Skrlac, former trustee of district 85, Vancouver Island North, 21 years' service. Gerda Fandrich,

district 34 from Abbotsford, 21 years' service. Annette Hambler, district 8, Kootenay Lake, 21 years' service. Bob Haslett, district 54, Bulkley Valley, 21 years. Pennie Jamieson, district 67, Okanagan-Skaha , 21 years. Nel Joostema, district 42, Maple Ridge–Pitt Meadows, 21 years' service. Laurae McNally, district 36, from Surrey, 21 years' service. Alan Chell, district 19, from Revelstoke, 22 years. Bill Christie from Prince George, 22 years. Norman Hayduk, district 92, Nisga'a, 22 years. Marguerite Kempin, Nicola Valley, 23 years. Lorraine Manning, 23 years, from Kootenay-Columbia.

Brent Atkinson, district 40, New Westminster, 24 years. John Malloff, district 51, Boundary, 24 years. Gordon Comeau, Nicola-Similkameen, 25 years. Michael Ewen, district 40, 25 years. Charles Hingston, district 64, Gulf Islands, 25 years. Jim Sinclair, district 78, Fraser-Cascade, 25 years. Rosalie Nichiporuk, district 91, Nechako Lakes, 26 years. Lastly, from my constituency, is Wilma Rowbottom, 27 years — 508 years of service to the community.

HUMAN EARLY LEARNING PARTNERSHIP

J. McIntyre: I rise today to speak about HELP, the Human Early Learning Partnership. This partnership is an interdisciplinary research network linking over 180 faculty, researchers and graduate students from six B.C. universities. HELP works in partnership with the B.C. Ministry of Children and Family Development and the Minister of State for Childcare.

HELP's research program contributes to new understandings and approaches to early childhood development and seeks to ensure that all children in B.C. have the means to reach their full potential. To this end, HELP's research aids in developing a better understanding of the biological, familial and community factors that influence the learning abilities and developmental outcomes of our young children.

To date, this partnership has funded 77 innovative and collaborative research programs across its partner institutions. HELP has also created socioeconomic maps for every school district in B.C., and it has distributed a community mapping toolkit across the province.

The toolkit assists local communities in analyzing these socioeconomic maps, as well as being an aid in analyzing the early development instrument, which is a provincewide survey used to assess children's school readiness on five different areas of development.

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With the generous support of the Michael Smith Foundation for Health Research, HELP has established a child and youth development trajectories unit that conducts studies tracking children's development from conception all the way through to high school graduation. Just this past February the partnership released the B.C. Atlas of Child Development. This atlas is a collaborative effort of HELP and the MCFD ministry. It provides colour maps that depict early childhood de-

[ Page 4181 ]

velopment trends across neighbourhood and school district boundaries and shows some very interesting patterns.

Looking to the future, under the leadership of the director Dr. Clyde Hertzman, the human early learning partnership continues to work on several initiatives to assist local communities, governments and decision-makers at all levels in their efforts to ensure healthy early childhood development.

FIRE AT SIKH TEMPLE

IN WILLIAMS LAKE

C. Wyse: On March 26 the Guru Granth Sahib, the Sikh scriptures, was burnt as a result of an arson at the Gurdwara Sahib Western Singh Sabha Gyani in Williams Lake. Great personal loss and hurt is experienced by a Sikh whenever the holy scripture is harmed. The most reverend priest of the Sikh religion was in attendance to celebrate Vaisakhi day and to assist with the cremation of the Guru Granth Sahib.

Giani Gurbachan Singh arrived in Williams Lake from Amritsar in India where the Golden Temple is located. He spent several days assisting in various services. This is only the third time he has participated in such a cremation ceremony.

I extended the personal sympathy and empathy of each MLA to Sikhs around the world as well as extended the personal wish of each MLA that the healing of each Sikh proceed as quickly as possible. Also, at the request of the mother of the person under investigation for the arson, I extended her best wishes to the Sikh community. I know each of us in the Legislature hopes he will receive the medical care he requires in order to be well.

On behalf of all of us in the House, I will advise the Premier of the situation facing the Sikh community in restoring the temple in Williams Lake. Waheguru ji ka Khalsa, Waheguru ji Ki Fateh.

In closing, I request the House to join with me in wishing Sikhs around the world a speedy recovery from their grief.

ASIAN HERITAGE MONTH

R. Lee: To acknowledge the rich and lengthy history and contributions of Canadians who trace their origins to Asia, May is Asian Heritage Month. Since the first celebration held in Toronto in 1993, cities throughout the country and British Columbia are hosting festivals and activities to recognize and celebrate many Asian cultures found in Canada.

In 2001, thanks to a motion in the Senate of Canada, May was officially designated Asian Heritage Month right across the country. British Columbia is home to hundreds of thousands of Asian Canadians whose origins stretch from the area around the Black Sea to the shores of the Pacific Ocean. These heterogeneous people have enriched our lives not only from their cultural contributions but also through their great entrepreneurial spirit, creating jobs and opportunities for all who live in our province.

Since 1996 the Vancouver Asian Heritage Month Society's annual explorASIAN festival has promoted the diversity of Asian Canadian life and culture in the lower mainland during May. In its tenth year, explorASIAN celebrates pan-Asian arts, culture through education, workshops, seminars, lectures and community outreach programs. In addition, scores of musicians, writers and other artists demonstrate and promote traditional Asian culture and arts activities. Today explorASIAN is Canada's largest festival during Asian Heritage Month.

As the Parliamentary Secretary for the Asia Pacific, I invite everyone to promote and take

part in the festivities that salute the heritage and contributions from our Asian Canadian population, who have helped make British Columbia the diverse and vibrant place it is today.

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ENCOUNTERS WITH CANADA PROGRAM

C. Trevena: On a cold April evening, Nicole Musfelt took the 45-minute boat trip from her west coast community of Tahsis to Zeballos, where the school board was meeting. She was to tell trustees about an experience she was never going to forget. Nicole had recently been on an Encounters with Canada trip to Ottawa. The grade 11 student said: "I learned how multicultural Canada is. I've never seen anything like it."

It gave her the motivation to relearn French, which she had stopped in grade 8 because she didn't think she'd ever need it. Nicole goes to Captain Meares Elementary School in Tahsis, where there are now just 29 students from kindergarten through to grade 12. Her Encounters with Canada trip brought together 120 students from across Canada to learn about our institutions, visiting Parliament and the Senate, about science and culture and to meet students from very different backgrounds. "It's too bad it's being shut down," Nicole told the board, who were meeting in a gym at the Zeballos School. "I have a totally different outlook on Canada."

It is too bad. Encounters with Canada is about to wrap up its mission of bringing together students from all parts of this huge, great country, giving young people from different regions and different cultures a chance to learn about their country and each other, a chance to understand what Canada is.

Encounters with Canada was part of the Canadian Unity Council, a body which was shut down as one of the first acts of the new federal government. B.C.'s Ministry of Education contributed to some of the costs of the program, as did other provincial governments. A great deal of volunteer time, energy, school trustee and teacher commitment went into making it the success it has been for thousands of students.

Nicole took the boat back to Tahsis the next morning, saving her a four-to-five-hour drive, and got there in time for school. Thanks to Encounters with Canada, she has taken a taste of her country back into the classroom at Captain Meares. It is a pity that other young people no longer have that opportunity.

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Oral Questions

SOFTWOOD LUMBER AGREEMENT

M. Farnworth: On Thursday the Premier stood in a press conference and stated that the proposed softwood lumber deal was good for British Columbia. On Friday the Premier wrote a letter to the Prime Minister expressing a range of concerns about this same deal and reserving the right to withdraw from it. To the Minister of Forests: what changed?

Hon. R. Coleman: You know, first of all, I'm proud of the fact that for the first time in over 30 years, there's a stable long-term agreement that can be put in place for softwood in British Columbia and the rest of Canada. Just through to the member, so he understands, as the deal was coming together at the last minute, the United States filed the ECC, which is a challenge that they could file, but they had to file by five o'clock Eastern time. Because that was filed and there were other things at play, before the Prime Minister was prepared to stand in the House in Ottawa, we sent a letter just to protect our legal position in British Columbia.

That's all that changed. Nothing changed, hon. member. The deal — as we dealt with when we sat together and put the framework together with the U.S. Ambassador in British Columbia and the rest of Canada — is a good deal for British Columbia, a good deal for the future of forestry in B.C.

Mr. Speaker: The member for Port Coquitlam–Burke Mountain has a supplemental.

M. Farnworth: I appreciate the minister's comments. We all would like to see a deal. We want to see a good deal. What we saw on Thursday was the Premier standing up saying: "This is a good deal for British Columbia." Now the minister has stood up here and told us: "Well, we did some things to make sure that we could cover ourselves."

Was the minister aware of those issues on Thursday? And if so, why didn't he raise those issues on Thursday and have the Premier say, "Yes, we think it's a good deal, but guess what. There are some things that we're also concerned about," instead of the saying to the world: "It's a good deal"? The Prime Minister is saying it's a good deal, and then these other things come out the following days.

[1425]

Hon. R. Coleman: Well, through to the hon. member, I think you have your days wrong. The letter was sent prior to and with discussion with the Prime Minister on Thursday. It was with regard to the extraordinary challenge and not to do with the actual softwood framework at all. The basic United States agreement on softwood lumber is in place. Frankly, I am surprised that the members of the opposition didn't actually get up and say, "What a great thing it is that somebody finally got this deal done," because I think somebody had to.

I mean, can you imagine? We didn't say, "Shut down Nanoose Bay," and get into an argument with the United States over this. We actually sat down and managed to get together an opportunity to make a deal. Now we have in front of us an opportunity for long-term stability for our forest sector on a seven-year deal with a two-year option.

There was the one letter that went. It was not about us departing from the deal. It was just advising, as instructed by legal counsel to do that. That's no big deal, frankly, because now that has been dealt with. With regards to what we know, they will do with the ECC in the future, as far as vacating it, as we move to the final document of the agreement that will be signed.

Mr. Speaker: The member for Port Coquitlam–Burke Mountain has a further supplemental.

M. Farnworth: Will the minister commit to tabling that letter in this Legislature?

Hon. R. Coleman: I think a letter between the Premier of British Columbia and the Prime Minister of Canada…. It will be up to them to decide what to table. It's not my authority to do such a thing.

B. Simpson: I believe that the Premier of the province is a public officer elected by the public, has a public duty and is acting in the public interest when he writes a letter to the Prime Minister of this country, who is also a public officer.

Again, to the minister: if that letter is only about the withdrawal of the appeal and not, as is reported, that the Premier indicated a series of concerns about this deal, a series of second thoughts about this deal and reserving the right to withdraw from the deal, then why will we not get a commitment today to table that letter in this House for all of us to see that?

Hon. R. Coleman: When you have 16 hours of negotiations per day for a six- or seven-day period, you want to make sure that all of your points are covered as you move through to a deal.

You know what this is about, Mr. Speaker? It's about this: "Thanks for your hard work on the softwood file. Although it's probably not exactly what we wanted, we can live with the deal. More importantly, we will now have a defined playing field that we can work within. We are a wholesale lumber company with a manufacturing plant in the Fraser Valley employing 80 people. We can tell them tonight that their jobs will be secure." That's what this softwood deal is about.

The framework is agreed to. We're moving forward. We should be celebrating the fact that finally there is a future for the forest sector in B.C. in a softwood lumber agreement.

Interjections.

[ Page 4183 ]

Mr. Speaker: Members.

Member for Cariboo North has a supplemental.

B. Simpson: I certainly do. I find it fascinating that the minister will read private correspondence between a third party and himself….

Interjections.

Mr. Speaker: Members.

The member for Cariboo North has the floor.

Continue.

B. Simpson: He can read private correspondence between himself and a third party, and yet he will not reveal what should be public correspondence in which British Columbians can have surety that they have a deal that is in their best interest — all British Columbians, all communities, all workers and not just one mill that we won't even have a name for.

[1430]

At the Council of Forest Industries the minister stated that B.C. is the big dog when it comes to forest products in Canada. The minister stated that B.C. also had a commitment from Ontario, Quebec and Alberta to play the lead role in softwood negotiations because of its 50-percent share in the market. Yet last week the same minister said: "We're just responding to the federal position." So if we were the big dog and had the commitment of the lead role, how did we lose control over the softwood lumber negotiations?

Mr. Speaker: Can you pose a question.

B. Simpson: My question to the Minister of Forests: how did this minister lose control so that we say it's a good deal and then we have to lodge a right to withdraw?

Interjections.

Mr. Speaker: Members.

Hon. R. Coleman: We did take the lead role on this negotiation. We were the ones driving the bus in this negotiation, and we were the ones working with industry across the country. What's more than that, the members might actually want to check with the mills in their community.

Actually, hon. member, I have permission to read that e-mail in the House. Besides, I want to tell you this. There are all kinds of unsolicited correspondence coming into my office today from companies all over British Columbia — from reman'ers to value-added, etc. — saying: "Thanks for finally remembering about us in the future of forestry in British Columbia."

What's more, I know who drove this deal. I know that B.C. was at the table. I know that B.C. was the leader in the softwood negotiations with the ambassador and federal government in this country. I do know this — that it was the best deal available for British Columbia for long-term stability for the industry, and we made the right decision on Thursday.

Interjections.

Mr. Speaker: Members. The member for Surrey-Whalley has the floor.

APPOINTMENT OF JOHN TOMLINSON

TO AGRICULTURAL LAND COMMISSION

B. Ralston: Last week the Minister of Agriculture and Lands made several new appointments to the Agricultural Land Commission. The Agricultural Land Commission Act clearly states that commissioners must be "knowledgable in matters relating to agriculture, land use planning, local government or first nation government." Can the minister of Agriculture and Lands clarify how he believes John Tomlinson, one of the two new appointees, meets the ALC's merit-based requirements?

Hon. P. Bell: All of the new appointments coming up — there are a series of appointments coming up to the Agricultural Land Commission at this point — are vetted through the board resourcing office to ensure that they meet all of the qualifications necessary to work on the panels.

Mr. Speaker: Member for Surrey-Whalley has a supplemental.

B. Ralston: Well, there are other qualifications that appear, I'm going to suggest, which came into play. John Tomlinson has close connection to at least one of the minister's cabinet colleagues. Not only is he apparently a friend of the Minister of Forests and Range, he also worked in that minister's 2001 election campaign and is the former B.C. Liberal riding association president for Fort Langley–Aldergrove — the same minister's riding. He has donated over $12,500 to the B.C. Liberals, together with his wife. He even starred in a B.C. Liberal election commercial as a "business owner."

The Minister of Agriculture and Lands has described the Agricultural Land Commission as "an independent, arm's-length agency." Is the minister seriously telling this House he didn't know? He's asking us to believe he didn't know of Mr. Tomlinson's political pedigree. Or is the truth that he has given Mr. Tomlinson a political directive to get Barnston Island out of the agricultural land reserve?

Hon. P. Bell: Although the member is trying to weave some threads here into a conspiracy theory, I'm afraid it just doesn't hold any water. There is nothing that the member just indicated that would not qualify the member or would disqualify the member from sitting on the panel.

Interjections.

Mr. Speaker: Members. Members.

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Hon. P. Bell: There is nothing there that would disqualify the member from sitting on the panel. If I might remind, the stellar performance of the NDP government through the 1990s with regards to the Agricultural Land Commission…. It was that government that chose to remove Six Mile Ranch and overrode the Agricultural Land Commission — didn't even allow them to have the decision-making process.

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This government is proud of the process that we have in place. We have agricultural land coming out at record lows — never been this low. In fact, in the first four years of our government there was less land that came out of the ALR than there was in the last year of that government.

M. Karagianis: Well, this actually is one of the worst kinds of patronage appointments that you could possibly want to see at this time in British Columbia. Given recent news events that have implicated the agricultural land reserve in a legal matter, we now have patronage appointments onto the Agricultural Land Commission. No order-in-council — in fact, a direct reward for someone who not only contributed to the Liberal campaign but worked very hard on campaigns of members of this House.

I would like to know why at this time, with the delicate situation around the agricultural land reserve and accusations in the courts today, this minister has allowed this kind of patronage appointment to the Agricultural Land Commission.

Hon. P. Bell: Certainly, the member that has been vetted through the process is amply qualified to serve on the Agricultural Land Commission.

You know, the member refers to orders-in-council. I just happen to be holding an order-in-council dated June 10, 1998, signed by the previous Minister of Agriculture and Lands, removing land and overriding the Agricultural Land Commission with regards to the Six Mile Ranch decision.

We are transparent; we are open. Land is coming out at all-time lows. In fact, at Barnston Island, the application the member is referring to — the proponent has asked to have that tabled for now.

Interjections.

Mr. Speaker: Members. Members. Member for Esquimalt-Metchosin has a supplemental.

M. Karagianis: Yes, I do. I'm glad that the member actually brought this up — that this is the most open and accountable government — because what we've seen here is circumventing the merit-based appointment process completely. Where is the openness in that?

This is a member who's been given a patronage appointment, who has played a significant role in election campaigns and contributed significant amounts of dollars, now sitting on the Agricultural Land Commission at an extremely important time in this government's history. The agricultural land reserve is being decimated day after day, and now we see a patronage appointment….

Interjections.

Mr. Speaker: Members. Can we have some quiet so we can listen to the question.

Continue.

M. Karagianis: We see a patronage appointment. Again, why was this not a merit-based appointment that should have been done in an open process?

Hon. P. Bell: Actually, there is a thorough vetting process. Everyone is able to apply for a position on the Agricultural Land Commission. There were a number of applications that came forward, and excellent ones.

The member talks about the decimation of the agricultural land reserve. I'm sorry, the statistics just simply do not back up the allegations. During the period 1996 to 2000 there were 17,433 hectares that came out of the Agricultural Land Commission. In the first five years of our government — 6,963 hectares. There's no decimation here. We're protecting agricultural lands.

R. Fleming: In addition to the resumé in which the minister didn't mention about Mr. Tomlinson being the former president of the Fort Langley–Aldergrove association, a former campaign manager and a large donor of $12,000, he also starred in the last election in Liberal campaign ads as an ordinary person.

The government has turned the Agricultural Land Commission into a who's who — a grazing pasture of Liberal campaign managers and Liberal donors. Before the government appoints further members to the commission, will the minister commit to post publicly and openly remaining positions and not make them the subject of pork-barrel patronage?

[1440]

Hon. P. Bell: If this is a vision of what we have for the week to come, it's going to be a slow week in the provincial media, I guess.

These are public postings. Anyone in the province of British Columbia is able to apply to sit on any Agricultural Land Commission panel around the province. I guess the member just hasn't actually looked up the website address. If he'd care to go to the government website, I'm sure he'd be able to find those postings.

But let's have another look at this. In the year 2000, the last year the NDP was in government, they removed 5,797 hectares from the Agricultural Land Commission. We didn't remove that in the first four years of our government.

B.C. FERRIES CONTRACT FOR

SERVICE TO NORTHERN COMMUNITIES

N. Simons: My question is for the Minister of Transportation. How can the minister agree with B.C. Ferries' claim that the sinking of the Queen of the North

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was a force majeure before the Transportation Safety Board or any other investigation has completed their work, let alone provided any answers?

Hon. K. Falcon: Actually, this appears to be one of those very rare — extraordinarily rare — events where the media might have got this a bit wrong. That doesn't happen often, but in this case I have to say that I was apparently quoted as saying that I supported that position. I want to be clear. I have never said that.

In fact, I do not support the application of force majeure, nor do I reject it. At this point it's something that the lawyers will negotiate between themselves. The key thing for the Minister of Transportation is ensuring, of course, that service is restored — as it has been to the best efforts possible through the Ferry Corp. — to the folks in the northern coastal communities.

Mr. Speaker: Member for Powell River–Sunshine Coast has a supplemental.

N. Simons: I appreciate that. It just happened to be on a government website. I'm just wondering: will the minister admit that paying B.C. Ferries Corp. $2.7 million of taxpayers' money for trips that the corporation will not be making is not just more evidence of serious flaws in the contract with the government?

Hon. K. Falcon: Well, here we go again. I'm having to school the members opposite in the research that they're doing. He quotes a government website. I believe he's referring to the independent ferry commissioner. It's not referring to anything I said. He is referring to comments of the independent ferry commissioner on his

interpretation of what B.C. Ferries said to him. So I suggest that the member might want to do a little more research in that regard.

The other area where the member might want to do some research is actually in the coastal ferries contract. It's actually on the website. If the member reads the coastal ferries contract, he will know that every quarter there's a reconciliation done on the amount of service that's actually been provided by the service provider. Where there are deficiencies, there are financial adjustments made.

The issue, of course, is that B.C. Ferries is alleging there is a force majeure incident here. There are provisions for unforeseen circumstances within the coastal ferries contract. Those are issues that will be negotiated between lawyers for the Ministry of Transportation and the Ferry Corp. Lawyers can have lots of fun with that.

The issue for our government is this. We want to make sure the Ferry Corp. is doing every step and taking every step they possibly can to restore service to those communities, and they have worked very hard to do exactly that.

FERRY SERVICE TO NORTHERN

COMMUNITIES AND FARE INCREASE

C. Trevena: To the Minister of Transportation. I would like to remind

him that he signs off on what the independent ferry commissioner does, particularly when it comes to fare increases.

I have constituents who are suffering greatly because of the vast reduction in services on the northern routes. In Port Hardy there has been a dramatic reduction in business over the last months, and we're seeing bookings disappear for the holiday season. Instead of helping these communities, the government is being seen to help the Ferry Corp., despite saying that the Ferry Corp. is independent.

I would like to ask the minister how he can justify paying off B.C. Ferries with taxpayers' money at the same time as increasing their fares.

[1445]

Hon. K. Falcon: Well, this is part of the opposition that, frankly, baffles me sometimes, when it comes to the whole B.C. Ferries situation. On the one hand, I'll hear the member for the North Coast demanding that we must get ferries in service and have ferries right away and that this has to be done. He's running around hysterically suggesting this. Then I get the member from Esquimalt — not this particular member — saying we need to slow everything down. We have to slow down.

Don't go ahead and order ferries, because we want to make sure the local shipyards have time in their otherwise incredibly busy schedules — because they're so busy, and the economy is so strong. I need to slow everything down so that they can have an opportunity to bid.

Just for once, I wish the leadership of the opposition would get their act together and figure out what the heck they want us to do. I can tell you what we're going to do. We're actually going to make sure ferry service is restored and the best possible service is being provided to the north coast and midcoast communities.

Mr. Speaker: Member for North Island has a supplemental.

C. Trevena: The issue — the Minister of Transportation might miss this — is that there is one ferry missing, which means there is no business for much of the north coast and the north Island.

B.C. Ferries is also looking to bring in the fourth fare increase, through a fuel surcharge, in 11 months — four fare increases in 11 months. The company is talking about a 7-percent increase on the smaller routes and a 3-percent increase on the main routes. Those routes that the minister might have forgotten link the Trans-Canada Highway with the Trans-Canada Highway. I would like to ask the Minister of Transportation whether he will listen to the people of B.C. and not give his approval, which he needs to give, to the fuel surcharge increase.

Hon. K. Falcon: Well, the member opposite knows that the independent Ferries commissioner is there to look after the interests of British Columbians in terms of the requests for fare increases as a result of fuel surcharges.

[ Page 4186 ]

You know, the member should know — whether it's the taxi industry, the airline industry, the bus industry…. Many industries are faced with the reality that fuel costs have gone up considerably. I know that in the past, the requests that have been put forward by B.C. Ferries have not been accepted by the independent Ferries commissioner — at least not the total that they were requesting and, in fact, reduced amounts. But fuel surcharges are a reality of life.

The member opposite will know that some of the folks from some of the areas that the member represents were here expressing their displeasure the other day. We pointed out that on the smaller routes, yes, for a passenger attempting to get on some of these ferries there has been a three-year increase in fares. They quoted the 35-percent figure, and that worked out to about 83 cents over three years, including all of the increase.

I recognize that's not an insignificant amount of money, but we also have to understand that the Ferry Corp. is doing its best to struggle with the fact that fuel costs have gone up over $22 million. I think their approach and the independent Ferries commissioner's involvement are appropriate.

IMPACT OF FERRY SINKING

ON HARTLEY BAY SHELLFISH INDUSTRY

S. Simpson: On April 25 the Gitga'at Nation wrote to the Minister of Environment concerning the sinking of the Queen of the North . In their letter to the minister, they made reference to comments that are attributed to the minister in the Vancouver Sun , April 21, where the minister is cited as saying that early tests indicate the environmental impact of the sinking is less than feared. The minister is further quoted as saying: "I think most of the clam beaches have been spared."

Well, in their letter the Gitga'at Nation does say that such comments are not an accurate depiction of the reality on the water, and they only act to instil anger and frustration in the Gitga'at community as they agonize over the safety of their food supply.

On April 20 we know that the minister and the Premier met with the Hartley Bay band, and at that time the Premier promised that they would be the first to know the extent of environmental impacts. Yet the very next day, the minister is quoted in the Vancouver Sun . Why did the minister break the Premier's promise to the people of Hartley Bay and not speak to them first about what he believed the situation is, rather than running off to the Vancouver Sun ?

[1450]

Hon. B. Penner: For the benefit of members, I'll just read a fuller extract of that

article that the member was referring to. In fact, the initial

part is a paraphrase written by the reporter.

Environment Minister Barry Penner says early tests indicate the environmental impact of the sinking is less than feared. "We do take it seriously though," he said. "I think most beaches and clam beds have been spared, but we're continuing to monitor if there's any risk to human health." However, Penner said he's committed to getting the fuel out of the

Queen of the North , with input from first nations leaders. "I would describe it as a delicate but vital task to see that the remaining fuel is removed."

Mr. Speaker, the information that we talked about in Hartley Bay and that I have at this point — which is the most up to date, although I've asked for a further update — is that out of 13 sites tested, seven showed no signs of elevated hydrocarbons. So the majority of the sites tested — i.e., most of the sites tested — showed no signs of contamination.

It doesn't mean that more testing isn't taking place. I've asked for a further update, and I'll provide that with the Hartley Bay people and others as soon as we get it.

Mr. Speaker: Member for Vancouver-Hastings has a supplemental.

S. Simpson: I'm pleased that the minister can read the newspaper to us here, but the reality is that the people of Hartley Bay — a letter signed by two hereditary chiefs, the Chief of the Hartley Bay band and councillors — asked the minister to get back to them and clarify these comments.

I talked to the Chief of the Hartley Bay band at 1:30 today. They haven't heard from the minister yet. Getting a well-deserved award for community achievement is one thing, but what the people of Hartley Bay really need is support and action on their economic and environmental problems caused by the sinking of the Queen of the North .

In their own review of these same results that the minister spoke about to the media, the Gitga'at biologist found elevated levels of carcinogenic contaminants in those shellfish beds on the path of the fuel released by the Queen of the North . They've called for more analysis and for a real plan to deal with the remaining fuel in the vessel.

Does the minister disagree with the findings of the Gitga'at people regarding contamination? When is he going to speak to them about the very real concerns they expressed in their letter of April 25?

Hon. B. Penner: The first time I had a chance to read the letter that the member refers to was about 20 minutes before two o'clock today. I will be getting back to the Hartley Bay people as soon as we have more information to share.

At this point the information is that the majority of the sites tested — at least, this is the latest information that I have — did not show any elevated signs of hydrocarbons. Of the five that did, two are believed to have been the result of normal seagoing traffic and not necessarily related to the sinking of the ferry. This leaves three sites that Ministry of Environment officials indicated some concern about. That's why we have called on Health Canada to help us perform detailed analysis.

It is an issue that we take very seriously. That's why, frankly, when the ferry sank on March 22, at 7:15 that morning Ministry of Environment officials reacted

[ Page 4187 ]

immediately, were dispatched to the site and set up an incident command structure that included first nations representatives being an integral part of that response. That's why the response has been as effective as it has been.

[End of question period.]

H. Bains: I ask permission to present a petition.

Mr. Speaker: Proceed.

Petitions

H. Bains: I have an 861-name petition from manufactured home owners of this province who are deeply concerned about the lack of compensation and protection they receive at the time when they get an eviction notice because the landlord may have decided to develop the land for other uses.

C. Wyse: I request permission to present a petition.

Mr. Speaker : Proceed.

C. Wyse: I wish to present a petition of 75 members of Dog Creek and Canoe Creek communities demanding that the roads be better maintained and that more of their roads be paved.

Orders of the Day

Hon. B. Penner: Mr. Speaker, I call estimates debate on the Ministry of Forests and Range in this House. For the interest of members, I call in the other House, the Douglas Fir Committee Room, continuing estimates debate for the Ministry of Community Services.

[1455]

Committee of Supply

ESTIMATES: MINISTRY OF FORESTS

AND RANGE AND MINISTER

RESPONSIBLE FOR HOUSING

The House in Committee of Supply (Section B); S. Hammell in the chair.

The committee met at 3 p.m.

On Vote 32: ministry operations, $473,203,000

Hon. R. Coleman: Just for clarification for the members present, I will be moving Vote 32 for now. I will also, later on, move to Housing. We'll do the Housing portion of the debates, but this will get us through this portion of the debate.

The ministry focus is twofold: forestry and housing. My comments on housing, as I said, will be reserved for later in the debates when I deal with the opposition critic with regards to housing.

In forestry our job is to oversee the public interest. That means providing leadership in the protection, management and use of the province's forests and rangelands. We're doing that, so to begin with, I want to speak about forestry.

The main agency responsible for the stewardship of 47 million hectares of provincial land is the Ministry of Forests. We have an estimated 3,559 full-time-equivalents and a budget of $723.8 million for 2006-2007, which obviously includes the Housing portion. Those numbers represent an increase of 282 FTEs and a budget increase of approximately $80 million over '05-06.

Our core business areas are protection against fires and pests, and managed fire to protect the provincial Crown land investments in the forest land base. This includes increasing emphasis on fuel management and constructive use of fire. On October 4, 2005, a new national wildfire strategy was developed with the expertise of British Columbia.

Pests. Of course we have a few of those in the forests, as we're all aware, particularly the mountain pine beetle. We'll expand on that later, and I'm sure we'll have some discussions with regards to that over the next few days.

Other bark beetles, though, do include things like the spruce beetle, the Douglas fir beetle, the western pine beetle and others. All of them are interesting little insects that seem to have unbelievable resilience when it comes to what they can do on our land base.

With regards to forest stewardship, I think it's important that we have sound environmental stewardship of forest resources. That includes looking at forest conditions and ensuring actions today to maximize the future health of our forests.

We manage range issues — for example, invasive plants, forest encroachment on grasslands, etc. We evaluate range practices. We restore damaged rangelands and work with other agencies to ensure a healthy and viable range industry.

In compliance and enforcement, we uphold B.C.'s laws protecting forests and range under the ministry's jurisdiction. For example, we enforce forest practices and enforce revenue and pricing legislation governing removal and transport of timber. We act on forest crimes such as theft and arson and mischief.

On the side of forest investment, through the forest investment account, some revenues are invested back into the land base. This ensures we have productive forests for future generations. One example is watershed restoration.

On the pricing and selling of timber, we ensure that British Columbians benefit from the commercial use of their forest assets. We provide a competitive regulatory framework, a fair pricing system and effective allocation of timber harvesting rights.

We also run B.C. Timber Sales, which is auctioning significant portions of the provincial allowable annual cut to generate pricing and cost data. That drives market-based pricing and provides competitive access to timber for industry.

[ Page 4188 ]

Our key priorities. Number one is timber reallocation. That would be completing our timber reallocation of 20 percent of long-term replaceable logging rights being reallocated; 8.2 million cubic metres are to be affected. All that volume is now being transferred.

All on-the-ground operating areas for B.C. Timber Sales have been identified, and we're halfway through identifying on-the-ground operating for first nations and community tenures.

To assist impacted workers and contractors, $125 million has been set aside in the B.C. forestry revitalization trust. The trust is administered by a board. The board consists of major licensees, contractors and workers, who establish eligibility criteria. By the end of March, $45.4 million was paid out to the impacted workers and contractors.

We created and expanded forest opportunities for 29 communities since August of 2004.

Obviously, when these notes were prepared, we were looking for a new framework on softwood lumber and some opportunities to have long-term stability on the land base. I think we're actually moving down the road to where we have that in the document, which basically outlines the framework between our two countries. People should always recognize that the actual softwood trade deal is between Canada and the United States, the two parties with regards to that.

On revitalizing the coast. There are some significant challenges on the coast, so we have to work with a number of people, including the steelworkers, the Coast Forest Products Association, industry and companies. We're reviewing the Competition Council report and submissions from the two industry advisory groups. The council believes an industry-led plan could be successful with support from government and has the best chances of success.

We've already started moving on several revitalization initiatives. They include market-based pricing, timber reallocation, proper pricing of pulp logs, and more use of weigh scaling and market studies.

[1505]

On the mountain pine beetle side, the infestation of the mountain pine beetle, as everyone knows, is the largest in B.C. history, affecting 8.7 million hectares of land. More than 400 million cubic metres of timber have been attacked. The mountain pine beetle action plan sets out steps for both short-term and long-term actions.

We've committed another $113 million for mountain pine beetle–related activities, to be spent over the next three years. The funded activities include an additional $75 million for Forests for Tomorrow, government's reforestation plan; $20.7 million to upgrade and maintain Forest Service roads at the heart of the infestation — this is in addition to $90 million from the Ministry of Transportation for highways affected by increased logging traffic; $17.5 million for additional staff to handle timber tenures associated with increased harvesting.

We're also working with stakeholders to plan our future forests. Participants include scientists, industry, communities, Canadian Forest Service, universities, licensees and first nations.

Last month we reached agreement with the first nations. An agreement for first nations was very important in that we will harmonize the plans between first nations and government with regards to the future of forests in B.C.

We're reallocating years two and three of funding received from the federal government to work with first nations — $2 million for wildfire protection and fuel management on provincial Crown land around reserves; $8.9 million allocated for first nation forestry council's strategic long-term plan to sustain culture and depend on invested forests; potentially $880,000 for research priorities identified by the first nations; and $1.3 million to fund first nations participation in the government's mountain pine beetle response team for a two-year period.

First nations are now full partners in the mountain pine beetle fight. The key to success is working together. We're the first government to set aside revenue-sharing for first nations — committed to increasing first nations participating in the forest sector.

Since September of 2002 we have signed agreements with 104 first nations, including forest and range agreements and direct awards. This provides access to 16.9 million cubic metres of timber and $119.6 million in shared forest revenue. Under the New Relationship, we've been working with the First Nations Leadership Council. Those discussions resulted in an improved forest and range agreement template.

In the transition to Forest and Range Practices Act, by January 2007 all forest companies will be operating under forest stewardship plans. We're well on our way to achieving that goal. At the end of March forest companies had advertised, submitted for approval or approved forest stewardship plans covering 40 percent of the annual allowable cut. We dedicate $12 million in the Forest and Range Practices Act to an evaluation program for the next three years to ensure that the new model is working.

I have come to one conclusion after being the minister of this particular ministry for the last almost year. I am gifted with some very qualified and capable people in the ministry, who are able to adapt and change and do things that are remarkable to protect the forests and build a strong forest industry in British Columbia.

A. Dix: In advance of the return of the member for Cariboo North — who is in fact, as the minister will know, our very able critic on forest issues — I wanted to follow up with the minister very briefly on the issue that was raised around the correspondence between the Premier and the Prime Minister during question period. I'm wondering if the minister would be able to tell us very specifically when he would be able to come back and tell this House and give this House an answer on that question. It seems to me that what we're talking about here is a very fundamental deal for British Columbia, for the economy of British Columbia, for all of the communities of British Columbia.

It seems, to me, important in this case. The minister will appreciate this, I think, because the minister knows that what happens when there's an absence of

[ Page 4189 ]

information in a sector that's so central to people's lives…. When there's an absence of information, sometimes people start to ask serious questions or have serious doubts about agreements. So I wanted to ask the minister….

I know that the minister is very interested in this area, and I know he will have been working very closely in the period since question period with his staff to get an answer for all of us on this important question of the nature of this correspondence and what it is. I wanted to ask the minister if he would give this House a commitment to come back to this House at the earliest possible opportunity with an answer to the important question that was asked during question period about the relationship and about the letter between the Premier and the Prime Minister.

[1510]

Hon. R. Coleman: I think I was pretty clear in question period. Of course, it's probably in a little bit of a different environment that we ask those questions, because it may be a bit more of a different stage.

Just for the member's information, the 27th of April was the last day possible for the U.S. to protect their legal rights under an extraordinary challenge under NAFTA. They had to file that, if they were going to protect their rights, by five o'clock Eastern time on the day that we were moving through this process. And you've got to appreciate there were four provinces, a U.S. coalition on the lumber side, the U.S. trade representative, our embassy, I'm sure their embassy, our Prime Minister's office and whoever else would have been involved. As we're coming through this, we're trying to get to where we would actually be in a position to announce prior to the end of that deadline.

That just wasn't able to be accomplished, so the Americans filed their ECC, which in my understanding they will vacate as we move through to the agreement — because, remember, this is a framework agreement. The Premier wrote the Prime Minister saying that we had concerns about them filing the ECC, and the advice was that we had to send that letter to protect our legal position as we came through the framework.

What people, I think, have to understand is that what we have today is a framework of an agreement. I think the member will appreciate — and the members should be aware of and probably prepared for — that over the next 60 days, as different clauses of the final agreement have some discussion back and forth, there may be some other public play back and forth with regard to what might be in one clause versus another, as the lawyers start to work through this agreement.

The framework agreement isn't very long, but I suspect that by the time the actual trade agreement is written, it will be fairly lengthy, and it will have whereases and wherefors and clauses in it. I would caution, as we go forward, that people understand that there's going to be a little bit of this. I think we'll hear from different players in industry anywhere in Canada and the U.S. that may have issues with it as we try and finalize that final drafted agreement. That would be the answer to that question for the member.

B. Simpson: I will come back to softwood and explore that somewhat.

I would like to make some introductory comments. Since I was appointed to this role by the Leader of the Opposition, I've been on a steep learning curve. Even though I've had ten years in the industry in all facets of the softwood side of it — the solid-wood side of it in particular — both in the United States and in British Columbia and Alberta, I've found that I had a lot to learn in terms of the policy and in particular about the coast.

During the months that I've been appointed to this role, it's become crystal-clear to me — and we've had the debates in this Legislature — that our number-one industry — the industry that historically British Columbia has depended upon as the main driver of its economy, and it still continues to be a major driver in our economy — is certainly in a state of crisis, the likes of which we have never seen or experienced. To suggest that this is stuff that we've seen before is simply masking the nature of the crisis that we have in front of us.

On the coast, though, the crisis has been painted as a crisis for the major industry. We talk about capital. We talk about the need to have a cost structure that allows that industry to be competitive in the global marketplace. We talk about it from the industry perspective. As I've travelled the coast — I've had the opportunity to be up in the Queen Charlottes; I've had the opportunity to be up and down the coast, in Campbell River and Nanaimo and Port Alberni — the real crisis, I believe, is what's happening at the community level.

Now, it's a derivative of what happens with the companies. There's a growing fear on the coast among the people who know this industry, who have worked in this industry, that because they're not included in this process — because they have in fact in many ways been excluded from this process — what's happening is that by default, the coastal forest sector will be turning into land developers and log-sellers.

That's not my fear. I don't know the coast as well. I'm learning it. That's the fear of the people who live in the communities on the coast, who have a long — in fact, generational — relationship with this industry — know it intimately. It's in their lifeblood. Many of them have given their lives to this industry, literally as well as figuratively. That's their fear.

[1515]

I was at a rally in Nanaimo on Thursday, where the road was shut down. People were out there. The concern — you could feel it. It was palpable in the air.

The other fear on the coast, and it's one that's generalized throughout British Columbia, is that communities are losing their benefits from our public resources. Lost in this debate is the fact that these forest resources are public resources and that there's an expectation that we derive public benefit from those resources. When the communities hear the minister talk

[ Page 4190 ]

about communities that are dining out on their industrial tax base or hear the Competition Council talking about British Columbians having to lose their entitlement mentality and that social rents are too high, there's a fear growing among community leaders, workers, unions and, quite frankly, among most of the independent operators out there that we're losing sight of the fact that in British Columbia our forests are public and we have an expectation of deriving public benefit from that. That's being lost in this debate.

Then, of course, there's the fear in communities all over this province that people are losing their livelihoods. They're losing their ability to pay their mortgages. They're losing their ability to give their children education. They're losing their ability to support their seniors in retirement, because they're losing their jobs.

As mill after mill closes, as community after community loses its industrial tax base because of those mills closing because of logging operations that are shut down, the communities and the workers are feeling that they've lost their connection to the land base, and they have lost their connection to an industry that historically was there for them to derive benefit from.

A lot of this is a derivative of the Liberal's forest policy. It's not just market forces. That's also lost in this debate. The Liberal government made a deliberate choice to do the 20-percent takeback. We'll get into that during the estimates debate. They also made the choice to engineer the revitalization trust the way that it has been engineered, so that some people can get access to the trust and some people cannot.

They've engineered the conversion, on the coast, to log exports through orders-in-council and through the way that they changed the Forest Act for the way that tenures are allocated and the way that tenures can be partitioned and purchased and become a private, tradable commodity. We will explore that at length.

The changes to the Forest Act that the government had done over — from 2003 forward, predominantly — has retracted both the minister and the ministry from a significant level of oversight in our forests, in the industry and on our tenure system. It's beginning to have significant implications. On the tenure system, for example, we're waiting for a decision from the competition bureau in Ottawa that would see Western Forest Products — a new player on the scene which has absorbed a number of older players there, but a player on the scene — have 44 percent of the allowable cut on the coast — in one company's hands.

If one looks at the revitalization plan, the intent was to diversify our tenure base, not to concentrate it. Yet on the coast, we see one company has 44 percent. In the interior we see two companies north of 100 Mile House that have the lion's share; in the southern interior we see one company that has the lion's share. That was not the intent of the plan, but you don't always get your intent when you make the degree of changes that this government made over the last number of years.

With respect to forest stewardship, we are actually losing control. The Forest Practices Board tabled their document today calling into question the legal framework, the regulatory and legislative framework for forest stewardship and forest management going forward and, in there, challenge whether or not we have the legal framework to ensure that we will be managing for the future, that we will have good stewardship practices on the ground in the future.

Again, on the coast we have Cascadia, which put in one forest stewardship plan for all of its operating area — many, many concerns expressed because of the number of watersheds and sensitive areas — all under some omnibus forest stewardship plan. That's an area that we will explore during estimates.

[1520]

As the minister and his staff know, issues around waste that is being left on the ground and the implications of stumpage and take-or-pay, issues around log exports, as I've mentioned…. All of that is growing a degree of concern on the ground the likes of which certainly I haven't seen in my ten years in the industry and in my 22 years of living in Quesnel, which is a forestry town.

It's not much better in the interior. The southern interior has been dramatically impacted by the waterbedding effect of the two-bit stumpage. I'm being told that people aren't certain what the April 1 interior log grade changes mean for them. They don't know what it means for their business plans. They don't know if it means it's going to be up or down. Most suspect that they're likely going to be carrying higher stumpage in the central interior, and it may still keep the stumpage high in the south. Many companies in the south are threatened.

In the central interior, again we have the issues of corporate concentration; the waste allowances on the ground, which I've expressed concerns to senior staff around; and of course road conditions. The degree of undermining of our road structure, both in our Forest Service roads and in our primary highways, is significant. Only this year do we have some money put aside for that, and we have a lot of backlog to catch up with.

Then, of course, the implications of the mountain pine beetle on the long-term allowable cut. As the minister well knows, the mountain pine beetle is not only eating up the older trees, the 60-to-80-year-plus, it's eating up the middle-aged trees, if you will, and it's eating up the teens now. That has significant implications for our long-term allowable cut, and that's something that needs to be explored as well.

Against all of this backdrop, there's a presumption in British Columbia that what we need to do to be competitive is get costs down and to get costs down at the expense of communities, at the expense of workers and potentially — and this remains to be seen — at the expense of what goes on, on our land base.

As the minister was apprised last fall by CIBC World Markets, the real challenge to British Columbia is that we are now entering into a market where the world is awash with wood. It's awash with logs from various sources, and it's awash with dimension lumber from various sources. As we've seen most recently, China is moving quickly toward becoming a competi-

[ Page 4191 ]

tor, not a consumer. That is causing quite a ripple through our industry.

The CIBC World Markets indicated, in fact — and again, it was in a ministerial briefing — that what we need in British Columbia is a Manhattan Project. We need something to the degree of magnitude of a creative way of thinking about what we do with our forests, or as one of the slides that was presented to the minister said: "You might as well lock up all of your forests in parks, because that forest has more value, in many respects, than just simply to liquidate it and to try and enter the marketplace on cost alone."

The Competition Council report — which the minister, I'm glad to see, mentioned and indicated that he was looking at; I look forward to a discussion about that — further exacerbated this debate by saying that British Columbians have an entitlement mentality they have to get rid of; that social rents are too high from our public forests; that wages are too high; that management costs are too high, and we haven't deregulated enough; and that stumpage, the cost of the fibre, is too high.

Despite all of those changes, when you go back to the CEOs and ask them: "What more do we have to do?" They say: "We want more of the same. We've got to go deeper, we've got to go harder, and we've got to get more of the same." Again, the predisposition there is that it's all about costs.

I believe there's a different vision out there. As I go around this province and talk to communities and to workers, there is a different vision. That vision presumes that what we need to do in the marketplace is drive on value — not to join the race to the bottom, but to make sure that the market demands wood from the highest certification possible, and to work with nations that want to sustainably manage their forests and change the market so that we have a high demand for certified wood at the highest level of certification.

[1525]

As the minister is well aware, the truck loggers have done a large poll in their area. One of the parts of this vision is more community control over the land base, more direct community input into decisions on what happens to the forest resources. Canfor just recently did six surveys in their operating areas for their CSA certification, which said exactly the same thing — that corporations control too much of the decision-making and policy-making, that communities and workers need to get more of that control back and that British Columbians deserve to derive more from their forests.

Part of that vision — along with driving certified wood, along with giving more local control — is to drive B.C. up the value chain to derive more jobs, more return to communities and workers, and more value for every log that we take out of our forest. In that is — not a change, I guess — a historical role for the Forest Service, and that is that they focus on excellence and forest stewardship.

As the Competition Council pointed out, what it wants — what the CEOs group wants — is a Forest Service that has more of a business mindset. They're very explicit about that. I believe we need to protect the Forest Service, particularly in a results-based code, to be more clearly focused on stewardship values and to not fall into that trap where we have only business interests or predominantly business interests driving what they do on behalf of British Columbians.

Finally, I believe that if we start to make some of those changes, we can have a competitive forest industry that positions itself in the marketplace not as a cost competitor — that would be part of it — but as a value competitor that operates off of public forests and that derives public benefit and derives best value from every log. That vision is there. The problem we have is that we don't have that Manhattan Project on the go.

Every time we ask what we need to do to address the issues in the forest industry, we go back to the CEOs. I have worked with many of these CEOs and vice-presidents in these companies. They are good people, and they are well-meaning people. But they have one driver, and that is shareholder value. The province of British Columbia and the minister's office and the Forest Service have another value, and that is forest stewardship that derives the best value to British Columbians. That's a difference that will probably flavour what we have here in estimates debate for the next few days.

With that, I would like to move into the questions. I see that the minister has senior staff with him. For reference, what I'd like to do today would be to examine some aspects of the service plan particularly around the finances, move from there into a further exploration of softwood, then from softwood move into the Competition Council reports and state of the industry, and end up today, hopefully, with a look at the Forest Practices Board and B.C. Timber Sales.

With that in mind, the explicit questions. In the fiscal plan, where we have both the revenue and the costs of the ministry, on the revenue by source — and I'm looking at page 10 of the fiscal plan; and I know that the minister will have in front of him some revenue figures, so I'll just ask my question and wait for the answer — it has revenue from forests as a line item under natural resource revenue. It has the updated forecast for '05-06 at $1.203 billion, and then it declines through '08-09 to $965 million. Is that all revenue derived from forests? That's all of the rents, stumpage, taxes on log exports, B.C. Timber Sales — all of those fun things that are in the ministry.

[1530]

Hon. R. Coleman: There are a number of things we take into account when we're dealing with revenues. These are the net revenues after, obviously, we take out cost for stumpage and whatever credits we give back for roadbuilding and what have you when we do the stumpage calculation.

The things that affect it the most would be the volume expected to be harvested. We think that's going to go down over the next number of years, a portion of it because of mountain pine beetle, but also because dur-

[ Page 4192 ]

ing 2006-2007 the U.S. housing market is expected to soften. That results in lower prices for lumber and other forest products for the next several years. The continuing strong Canadian dollar will also decrease stumpage revenue for the next few years because the dollar has quite an impact. Japanese lumber and pulp prices are a challenge for us, as the member knows, and the exchange rate with the U.S.

It's basically a conservative estimate, given those factors as part of the calculation.

B. Simpson: I have, by FOI, the estimates debate binder from last time, and I have a breakdown on revenue forecast that includes timber tenures, B.C. Timber Sales, total ministry stumpage revenue, other forest revenue and logging tax. In that breakdown — and that was the estimates — in the slide as you move towards that decline, where will the biggest hits come from? If I understand the minister correctly, the stumpage revenue because of a volume decline…. What about some of the other forest revenues?

Hon. R. Coleman: The biggest hit, as we describe it, is in the timber tenures, which is the major licensees and the major harvesting, expected to drop off over that period of time for the reasons I explained earlier.

B. Simpson: Are there any other revenues derived from the forests and from what the Ministry of Forests and Range has operational responsibility over? Or is this line item, which goes from the 1,200 in '05-06 down to 965 in '08-09, the sum total of all of the derivative revenues from what the Ministry of Forests and Range is operationally responsible for?

[1535]

Hon. R. Coleman: The numbers are actually lower than what you had in the previous estimates binder because of the adjustments going forward, as we've had to do this year's movement out with the Canadian dollar and what have you.

Maybe for the member's information, the '08-09 numbers are actually expected to be $918.9 million now. We've actually lowered our expectations on revenue. It still comes from the timber tenure as being the largest of that that the drop would be expected within. My understanding is that, except for a small amount of export revenues, it would be, basically, targeted through a different ministry. Those are the total dollars from this ministry.

B. Simpson: I'm actually not going from the last budget. I'm going from this year's fiscal plan, so I appreciate getting the further update. But again, my point is that all of the operational areas of the Ministry of Forests are covered under this revenue stream. That revenue stream is declining. It must now be 34 to 35 percent over this three-year projected period. Using the figure of 1,203, which was in this fiscal, down to 965, I have a decline of 33 percent there. So if you go down to 918, it's declining even further.

Do I understand that correctly — that the revenue stream from all of the operational areas of the Ministry of Forests is declining by about a third over the next three years?

Hon. R. Coleman: That's correct — approximately.

B. Simpson: I'm actually surprised that the volume decrease expected is in the mountain pine beetle areas in the interior. I had an expectation the volume decrease would be on the coast, because we've already seen that, and it's starting to track that way. It's only a three-year window. My understanding of the AAC uplifts and so on that are coming on…. We still have some districts that haven't done their uplifts yet; 100 Mile House is just in the process. My understanding is that in the Quesnel TSA, even up in the Vanderhoof area, the volumes are still ramping up. So why would we see a decline over this three-year period? My expectation would be further out.

The direct question to the minister, then, is: what is the volume decline that we're going to see?

Hon. R. Coleman: There are two major things that affect what happens with regards to our commodity, no matter whether we have an uplift in mountain pine beetle or not: the housing market in the United States, because 85 percent of our market that we ship is to the United States; and the continuing strong Canadian dollar, which has an effect on whether somebody's going to sell at a certain price.

The interesting thing is, of course, that these numbers were done prior to us getting to a framework on softwood lumber, which may actually have a positive effect back the other way now with regards to government revenues. But we don't know that today. It'll take a little bit of work as we walk through the agreement to get there. But our expectation is…. I think what we try and do is try and be relatively conservative. Basically, stumpage rates are determined using the comparative value pricing system. Rates are determined in two steps.

First, an average stumpage rate is determined based on lumber and chip prices as measured by Statistics Canada; and second, the stumpage rate for each cutting permit is determined.

Those are specific. As higher and lower depending on average, depending on quality of fibre and a number of other things…. As the member knows, the deteriorating quality of the fibre in the interior is probably, as the market adjusts, going to actually adjust the price of what we might get for us as far as the net revenue is concerned.

[1540]

It certainly is a huge challenge. I do know as we went through this process, I wanted to be very conservative, because I didn't want to put the fiscal plan at risk by being overly optimistic on the revenues. I'd rather outperform the revenues than underperform the revenues.

B. Simpson: The minister has indicated that this is predicated on a number of market factors, which then

[ Page 4193 ]

drive back to what the expectations are on the land base, and then you take a look at your revenue stream from the land base. If I understand the minister correctly, it's an indication of the potential softening of the U.S. housing market, and the fiscal plan supports that and so does the group that does the independent forecast for rationalizing the government's plan.

What was the estimate on price, going forward? What was the price point that the government based this fiscal plan on?

Hon. R. Coleman: I'll read it right from the document for the member, because otherwise, I'm sure I'll get it wrong:

On the price side, U.S. lumber prices have remained reasonably steady since the last forecast undertaken September 2005. The price for SPF 2-by-4s is expected to average $338 U.S. per million — I would imagine that's a thousand board feet — in 2006-2007 and decrease to — we're using an estimate of decreasing — $300 U.S. early in 2007-2008 and remain at that level through a number of years. All that depends on the market and whether there are more housing starts.

Obviously, we would like to find some other markets for some of our wood.

B. Simpson: Just a bit of clarification for me for later discussion. In the softwood agreement the Random Length's framing composite lumber price was used. How does that differ from the price forecasting on 2-by-4 random lengths?

Hon. R. Coleman: The Random Lengths composite is usually quite a bit higher — $40 to $50 per thousand. We can, if the member wants, probably arrange for somebody to give him a technical-pricing briefing versus us trying to figure that out here today.

B. Simpson: I appreciate the offer. The point that I wanted to get clarification on is that we do our fiscal projections on one metric, yet in the softwood agreement another metric is used. So it strikes me that there's a misalignment there. If, for the seven-year agreement, we're going to use the Random Lengths framing composite lumber price, why wouldn't we do our fiscal forecasts on the same so that we have an understanding of what the market implications are for being in this agreement? Why two different metrics — one for fiscal forecast and one for seven-year agreement?

[1545]

Hon. R. Coleman: Because the SPF 2-by-4 is the massive, massive majority of the business, it's the best for us for pricing internally to project revenues. The composite includes a whole bunch of other things. It includes not just 2-by-4s and 2-by-6s and 2-by-10s, but it can also include things like siding and flooring and a number of other things.

On the softwood deal it was just that it was better because that's a number we can all focus on out of the commodity markets and understand what that is. It gives us a price point. But for doing internal calculations to actually measure back, as I understand it, and be more accurate to what we're actually getting out….

Part of this whole thing is about, you know…. If we have somebody who says, "We got this many logs," we know by historical figures, I would think, that if they've cut so many logs and they're putting out this many 2-by-4s…. We know how many they actually have had. The composite would probably muddy the waters on those calculations for revenue purposes.

B. Simpson: In the discussions around softwood — I want to come back to the substantive part of the discussions — did the minister have in front of him a longer-term projection on the Random Lengths framing composite index? If so, what was that longer-term projection? It strikes me that if I'm going to sign off on a deal that has that as the metric, I need to know what the projection is to know what the net impact will be on the proposed tax.

Hon. R. Coleman: Yeah, we had all kinds of technical data in front of us as we went through this discussion, both in Canada and in the U.S. I'm happy to share the Random Lengths composite forecasting, using what we call RECI, with the member, at dinnertime or something. I may need the copy in front of me, but I'm certainly happy to share it with him. He can have it.

What we did was…. We had our technical people located strategically, I guess, to make sure that the information was available as numbers were moving back and forth, so people could understand what they were. In addition to that, not just us but most companies of any size across Canada were doing the same thing, I think, as were other jurisdictions, as well as were the federal guys. It was a pretty live process.

B. Simpson: I'd appreciate a copy if that's possible. That would be helpful.

Just a quick gist as you look at the forecast. This is a seven-year deal. What happens to that particular index over the course of the seven years? You've got three price ceilings here. I just want to get a sense.

All of the market indicators that I have seen and that are reflected in the government's fiscal plan are downward pressures on prices. I'm curious to know: what does that downward pressure look like as you forecast that metric out, say, just over the next three or four years?

[1550]

Hon. R. Coleman: The expectation is that over the next number of years we will be, over 50 percent of the time, at no tax and will be shipping volume without restrictions — if you're in the tax side of this scheme. If your region chooses a quota, then the quota is tied to a market share that is predetermined and is affected by pricing going downward. There's an estimation of about two to three months' work to be done on the agreement, in which this stuff will be worked through.

I hesitate to get into a whole lot of detail about what this thing looks like, because we have a frame-

[ Page 4194 ]

work that now leads to the agreement. The framework is, I think, fairly sound and will lead us down the road to where we need to get to. Certainly, when we did the numbers coming through the discussions, this is what drove us to make sure that the price came down to where we actually established it.

B. Simpson: That 50 percent and the no-tax range is helpful, and we'll look at the framework shortly. Coming back, then, to the projections around revenue, the minister indicated that the stumpage component was based on CVP. Did that include the interior lumber grade changes? If so, did the ministry project an upward or downward adjustment as a result of the interior log grade changes, if they're using the CVP measure for revenue?

Hon. R. Coleman: The grade changes are revenue-neutral.

B. Simpson: Does the industry, in his estimation, see it as revenue-neutral to them? Quite frankly, what I'm hearing throughout the interior is a fear that we may be seeing higher stumpages. So while the ministry has it as revenue-neutral, what's the sense and the feedback that the minister is getting from those that will be impacted by that change?

Hon. R. Coleman: A lot of work was done on this with industry. It is revenue-neutral. That's not to say that in one area — where somebody has been getting a sawlog at a discounted price because they've been calling it something that it wasn't — the grade changes might not catch some of that and maybe affect some of the averages, but certainly it's revenue-neutral across the interior.

My expectation is that it allows us to measure the value of the fibre better as we do the grade changes, because that was one of the concerns about this whole thing. The member brought it up to me before about stumpage bingo and all that, and that's what this is aimed to eliminate. We started a fairly extensive process with industry last August, moving to the April 1 deadline, and worked it through pretty well.

B. Simpson: The stumpage bingo component. Again, I'm aware of a review of stumpage bingo and the impacts of that. What's the status of that review, now that the minister has raised it? When will we see that report, and will that report be tabled publicly?

[1555]

Hon. R. Coleman: The report is done by an independent consultant. The conclusion was no statistical correlation on the quarterly assessment with regards to this issue and no impact on the safety. We're sharing that, obviously, with the people we work with on WorkSafe B.C. and also with the safety group we have, which we participate on. I'm happy to get a copy of the report to the member.

B. Simpson: Again my thanks to the minister. On all those sleepless nights I can just go through these reports and cure my insomnia, but I do appreciate looking at that. As the minister is well aware, that's something that's been out there as an issue, and I'd be curious to see what the consultant ended up saying.

Back again to the revenue projections. The minister and the Premier have indicated to the Council of Forest Industries that we're going to change to market pricing in September in the interior. With respect to the projections, the minister indicated that it was based on CVP. Was there any account taken into what the potential adjustment will be to a market pricing system? What does the ministry believe will be the net impact on revenue of switching to market pricing in the interior?

Hon. R. Coleman: We do our projections based on the system we're operating in at the time. That's where the CVP comment comes from. Basically, we've modelled the system. We've done our modelling.

Obviously, through the next number of months, as we deal with some of the issues on softwood and moving forward, we would probably, after a quarter of operation, do our adjustments — once we saw what the impact was, if there were any. We're not in a position to put in place, on a revenue side for finance, a projection based on something that's not implemented yet. Once we implement it, we will then watch the system. If necessary, we will adjust our revenue projections accordingly.

B. Simpson: I think there are lots of people who have lots of ideas of what that may do. Certainly within the industry there's an assumption of some sort of correction in the marketplace as a result of the interior log grades shifting and looking for the overall hit to them to come down.

On the revenue side, we've established a decline in revenue. I believe we've established that all the operational area of Ministry of Forests derives that revenue. I'd like to switch now to the expense side and understand and explore some of the expenses here.

[1600]

First of all, again according to the fiscal plan on page 11, the Forests and Range expenses over the same period increase from $834 million, or whatever it is you've got, up to $976 million. Are there other expenses that are associated with the Ministry of Forests and Range's functional obligations that are not included in these expenses — that are associated with the operations on the land base but are not included as a line item? I'll come to the service plan, where the line item is out. But are there other expenses that accrue to government from managing our forests, which are not shown in the Ministry of Forests and Range line items?

Hon. R. Coleman: No, this is the operational cost of the ministry, and that number the member is quoting also includes the other part of the ministry, of course. That's it, except if we had an extraordinary fire season, which would then have an impact which we…. Usu-

[ Page 4195 ]

ally, I think, we have a notional access to contingencies if we needed it.

However, when I flew back from Edmonton the other day, I was very happy to see the level of the snowcap that's existing. I look at the snowcap differently than I did when I was worried about floods. Now I look at it and think: maybe it might stop the forest fires.

B. Simpson: I say a hearty "amen" to that comment.

The point I want to get at, though, is that for example, the revenue functions from the Ministry of Forests and Range have been put over to Revenue branch. There are expenses accrued to Revenue branch from collecting some of the stumpage and finances as a result of the operations. I'm seeing nodding. Does the Revenue branch then break down its costs associated with that particular aspect of managing our forests?

Hon. R. Coleman: We do the pricing and the billing, which is the big cost. Revenue does the collection. I guess you'd have to ask the Minister of Revenue what he spends on it. They do the collection. There is some cost recovery, I understand, back and forth between them and the forest companies as well. Our budget deals with the pricing and the billing, which is the most expensive part of that whole package of getting the revenue.

B. Simpson: Part of what I'm getting at is that there are dissipated costs for the work that we do to extract our forest resources and to have the forest industry work on our land base. Revenue branch is one of them. Some of the work that Agriculture and Lands would do around LRMPs, LRUPs, and so on, is costs that really accrue to setting objectives and doing plans and so on that the Ministry of Forests and Range then derives the operational plans from. So that's a cost of doing business in British Columbia that accrues to the Crown.

Minister of Environment bears costs. Economic Development and Community Services would bear costs, particularly now around some of the activities that they've got in mountain pine beetle and growing our presence in the Asia-Pacific.

[1605]

Even recently the Office of the Premier is having Ken Dobell involved down in Washington doing softwood negotiations. So while the line ministry is seeing this increase in costs, there are also a number of dissipated costs throughout government that need to be factored in there.

To the minister: at any point, has anybody sort of sat back — and I know this goes across governments and across parties — and said, "What does it really cost us to run the forests for industrial activity in this province?" to get a sense of that more holistic cost structure?

Hon. R. Coleman: I just simply don't have those numbers.

We have the integrated land management branch that does certain things on the land base. The member is right. We participate in land use planning, but in some cases it benefits us as well, because we can actually have some certainty on the land base. We have forest roads that we've constructed also, obviously moving into some of the recreation values of the land base.

It's one big land base, and we manage our end of it and deal with our revenues and costs on it. I guess when well over 90-some percent of the land in British Columbia is owned by the Crown, it's going to be a big function of a lot of ministries of government. We're responsible for the forestry side where we know what our cost is to deal with the tenure, deal with getting the plan done, getting the approval out the door, collecting our stumpage as to what we think is the revenue coming off that base.

But there are all kinds of other values on the land base, of course, as the member knows. There was some argument that used to be made by his former MLA, prior to him coming into public office, about the value of a cow on the land base versus the value of a log. There were always some interesting discussions that took place with regard to that too.

I don't know that you would ever get to…. I think the integrated land management branch tries…. We do that integration, particularly things like oil and gas and other resources, but the reason we have other ministries is because there are so many values that come off the land. You have mining, you have oil and gas, you have tourism, you have agriculture, and you have forestry, of course, which is our responsibility. I'm simply not in an integrated position to give the member that answer today.

B. Simpson: I take the minister's point. There are other derived values, but there are also some explicit costs associated with just the forest activity on the forest land base that aren't shown — and that's the only point I want to make — in the ministry's cost structure. However, they are more directly related to what the ministry derives as revenue from that Crown land base.

Before we get into the breakdown, it appears to me, just from the gross numbers, that the Ministry of Forests and Range becomes a cost centre in '08-09 — that it derives less revenue than it costs to run the Ministry of Forests and Range. Is that correct?

[1610]

Hon. R. Coleman: Just so we can make sure we're talking about the.… In '08-09 the Ministry of Forests budget will be $745 million. The $976 million includes the difference, which is Housing. So if we're going to have a discussion around numbers, let's start with that one. The $976 million includes Housing, which also has some offset revenues that come in from agreements we might have with the federal government and all of that.

We don't get credit for those offsets in our budget. We get the budget to actually operate from, and the revenues in '08-09 are $918.9 million from forestry. There are offsets as we go through, and we actually

[ Page 4196 ]

calculate costs that get offset against roads and silviculture and that sort of thing as well.

I don't know how we get to the answer the member is looking for, but even if you did the base from there, it's still $100-and-some-odd million net if that was the cost of all the costs of forestry and all the revenues to government.

B. Simpson: Well, maybe what would be helpful, since the minister obviously has different projections in front of him, is just simply to go to what the forest revenue is in '05-06, '06-07, '07-08, '08-09 — because they're working off of different numbers than we've got here — and then what the actual Forests and Range portion of the ministry's costs are. I can make a quick table in front of me here so that I can see those figures lined out.

Hon. R. Coleman: We'll see what we can do about that. I just want to also remind the member that when the guy who drives a logging truck buys his gas, he's paying provincial gas tax. When he buys a tire, he pays the deposit to the environmental thing that would go into the tire levy. When somebody builds a mill, puts in capital and employs a few hundred employees, they all pay provincial income tax, and then the corporation pays tax.

So the dollar value that's driven out of the forest — a portion of it is actually the revenue to government off stumpage. The rest of it…. Well, that's where actually the biggest impact on our land base is, as the member knows. Even something like a pulp mill — which has a huge impact economically in a community, employs a lot of people and that sort of thing — is not caught in the revenue projection of the ministry because the ministry actually performs a lot bigger service than just the collection and calculation of stumpage. It actually drives the entire sort of infrastructure of forestry in B.C.

But we will try and get a table so that we're talking about the same numbers back and forth. We'll get that to the member.

B. Simpson: Again, I take the minister's point, but the minister is also aware that we are losing jobs, we are losing mills, and we are losing road construction contractors, logging contractors. During this same time period where we're seeing a decline in revenue to the Crown, we're also seeing a decline in the forest sector in those additional revenues that are derived from activity on the land base.

So the minister's point is taken. But during this same period out to '08-09, we're going to see a decline on those additional multiplier revenues to the Crown as well and have, quite frankly, already seen it in many, many communities. My preference would be, if the minister has the figures in front of him, to put them on the public record by simply giving me those two figures now.

[1615]

Hon. R. Coleman: I'm going to do that, but I would caution the member. On Friday I'm going to Port Alice to reopen a mill. In the member's own riding, Dunkley invested $75 million in the last year and a half. So let's not say that everybody is closing and everybody is vacating the field.

Actually, a lot of the response I have from the value-added people is that they're about to reinvest because they now have a stable marketplace, which they can actually ship into, for things like siding and flooring and that sort of stuff that they've been disproportionately taxed and hit with duty for at the U.S. border.

We recognize that we've got some challenges, but it's not all doom and gloom everywhere. We've seen some other investments take place, and we should recognize those. We also know, as the member knows because the member was in the industry, that it's an industry that actually changes and adapts over time. Some come; some go. More additions; different things. We're dealing with the OSB issues up in the interior and pellet plants and those sort of things that we're trying to get going.

Out of the service plan of '06-07 to '08-09, the restated estimates for the costs of running the ministry in '05-06 was $652.803 million. The '06-07 estimates are $723.814 million; in '07-08, $738.261 million; and in '08-09, $745.778 million. I think I said millions, not thousands, on the previous one, but it is millions. It would be nice if it was thousands, I suppose.

On the revenue side, the performance indicators. Crown Forests and Range gross revenue in billions in '04-05, the predicted number, actual, was $1.322 billion. In '05-06 the estimated actual estimation is $1.157 billion. In '06-07 the projected is $1.073 billion. In '07-08 it's projected at $962 million. In '08-09 it's projected at $919 million. That's stated in the service plan as $0.919 billion, but that's the same thing.

I think when you deal with a commodity and predicting its revenues out for any lengthy period of time, it is always a huge challenge. Something could happen in the United States with regards to a major event like a Katrina or something like what happened in Florida with hurricanes, and it could change the entire projection of our revenues because the value of our product could go up. That's the challenge governments always have with commodities, whether it be this one or something like natural gas. Natural gas, for instance — we were spiking in December.

If somebody had said, "Let's use the number we're spiking at," we could have actually tried to think we could book a whole bunch more money. But it moved down about $3 or $4 in a short period of time, per whatever the measurement is, and each dollar is $300 million to government.

The challenge on a commodity is going to be…. Even looking at the historical projections of forestry over the last number of years by Revenue branch, it's pretty hard to hit the target — the nail on the head — when you're projecting out that far on a commodity. You don't know what could happen with the commodity. As the member talked about earlier in his comments, there are some other challenges outside of North America with regards to our products from ju-

[ Page 4197 ]

risdictions like China, and the Russian wood that's expected to hit some mills in the eastern bloc that are being built and that sort of thing. It's going to be a very fluid file, I think, over the next few years.

B. Simpson: Fluid is a term we use in our caucus for when we're in the House here. That's why I giggled a bit there. Yes, fluid is a good word.

With respect to the minister's comments about the versatility of the industry, the ingenuity of the industry and so on, the minister is also well aware that we can't sugar-coat what's going to happen in the pulp sector. Everybody who's looked at it says that we're going to be hard pressed for that sector to come out in the next decade with any mills left in British Columbia. It's that competitive in the global marketplace.

[1620]

We're also going to be particularly hit in dimension lumber, because where most of the world's fibre supply is going to come in at is dimension lumber. They're going to be targeting the U.S. market. Yes, there are a few bright spots around, but as the minister knows, in the southern interior it's very hard to point them out. I know that one of the drivers for the minister in getting a softwood settlement was getting that cash back for some of those mills there. Without it, those companies are in trouble, and there's no way to sugar-coat that.

We see that even in Canfor's case, they took their pulp mills and flipped them into an income trust because they are looking at the future and, I think, doing the right thing from a shareholder perspective. But it really calls into question the long-term viability of those pulp mills.

We'll talk about value-added shortly and the future of value-added, but I think the minister and I both agree that that's where the future has to be. It can't be in the commodity business as our sum total of activity.

Back again to the revenue projections. I just need one figure, if the minister has it. It used to be tracked, so I don't know if it still is. That's the number of jobs, direct employment, derived in the B.C. industry in 2005.

Hon. R. Coleman: I look forward to the other discussion about value-added, because the member is correct. A large dimension mill that is actually a modern mill can operate with very few employees, given the technology that's out there today. When somebody is making finger-jointed 2-by-4s or siding or what have you, we have to start to learn how to drive that value out, because we are going to face some international and world challenges with regards to this stuff.

That's why, just to let the member know, in the softwood memorandum of agreement there is a third-country measurement to market share. I think we've finally got the U.S. to recognize — as I've been saying to them for a long time — that while you're fighting with your neighbour to the north, somebody's sneaking in your back door and stealing your marketplace, and you should pay attention to that.

I'll give the member the Canada stats. We will get the B.C. stats. We don't have them here, but we've just sent a request for them. The Canada stats in 2005: for forestry and logging, 7,150 jobs; support activity for forestry, 5,164; wood product manufacturing, 34,284; and in paper manufacturing, 12,396. To anticipate the next question from the member, this is down slightly from '04-05 in the first three — actually, in three out of the four. The wood product manufacturing seems to have held pretty steady, and the other two are down slightly.

B. Simpson: Those are the Canadian stats?

Hon. R. Coleman: StatsCan.

B. Simpson: StatsCan? Okay. If the B.C. stats come in on that, I'd like to see those figures as well. Thank you for that.

Let's take a look at page 17. Again, by the looks of it, this has changed since this was published, so I'm just going to have to work off of the page in the service plan that we have to work with. With respect to staffing….

[1625]

I have to say that I find the current service plans not complete enough. It's very difficult to pull information. If I go back and look at service plans prior to this changeover, there was certainly a lot more information and a lot more detail in the plans. I could get how much silviculture activity by region and broken down. I could get cut levels. I could get employment. There was all kinds of detail in the plans.

I know from the perspective of streamlining and people being able to have a palatable

summary or report…. But as the critic, the more detailed report actually would truncate some of the questions that we might have. There are some questions here that go to the lack of detail in this.

In the FTEs — and I want to talk about the explicit parts of this shortly — I don't see and hear where we have our line item for contractors and the cost of contractors. In the old service plans we used to actually have it broken down, and you could even break it down by district. Does the ministry have a figure for contractor costs?

Hon. R. Coleman: We don't have the number right in front of us. I do know that the largest number is actually in B.C. Timber Sales, out of the number that we have for consultants and contractors. We will get those numbers for you. I actually take the member's comments fine on the service plan. One of the criticisms of them that we had from the public was that they were too big and too cumbersome for most people to even get an opportunity to have an understanding of service plans. So there was a corporate decision to try and make them more, I guess, user-friendly to the public.

There is a more detailed business plan for the ministry, and we're more than happy to give it to the member. It is also, as far as we're concerned, public

[ Page 4198 ]

information, which would give you a lot of that detail that you wouldn't normally get in a service plan. It's the stuff that we talk about in the past. We will endeavour to get you a copy of that.

B. Simpson: I think that would be very helpful. Again, there is the public consumption of what's going on and taking a look at it. But in my obligation to the public, I'm supposed to look at the more detailed portions of it. The business plan, if that detail is in there, would certainly be beneficial.

One of the things about the contractor costs that I'd like to know is: does it then appear…? It's not a line item under the FTEs as they used to…. They used to have a table, and I'm looking at one just now from '95-96 that has a breakdown by region, has salaries and benefits and the FTE allocation — then professional services or contract services broken out as well. Given the government's downsizing and work that was done — and we had this debate in the last session — it would be nice to know what was shifted.

I can tell you from my own experience in the industry, I have helped to engineer a number of downsizings. If you don't track your professional services or your contract services very, very closely, you quickly find out that all you've done is outsourced the work, and the costs have not gone away. So from a metric perspective, that is a very important metric for tracking, particularly after you've so-called right-sized an organization. I would certainly like to see the contractor figures.

With respect to what's on page 17 of the service plan, are those contractor figures included? As the minister indicated, most of it's in B.C. Timber Sales. Are they then included in that line-item cost just as part of the cost of B.C. Timber Sales?

[B. Lekstrom in the chair.]

Hon. R. Coleman: Yes, they are.

[1630]

B. Simpson: With respect to how the ministry, even in their business plan, tracks contractor costs, how does it track it? Does it identify it by region? Does it identify it by specialty area? How are those costs tracked?

Hon. R. Coleman: First of all, I'm very aware of that challenge, as a matter of fact, so much so that I've actually been tracking this with my ministry. We can do it by business area. We can do it by region. We can do it by classification.

As the member knows, in B.C. Timber Sales, for instance, it could be a forester, or it could be a geologist. It could be a number of things. There are codes for all of this that allow us to track them, so we are watching them.

B. Simpson: Are those tracked out in the business plan, or is that a separate report that the minister then gets if the minister is tracking it? Does he get it as a separate report to him, or is it just part of the business plan, and you break it out?

Hon. R. Coleman: Let's be clear. I get the general information that I ask for. I don't track the daily operation of the ministry. That's the deputy's job, and he gets that information in way more detail than I do. I actually ask what the general numbers are as we go through budget. I ask questions with regards to how we're managing contracts. I have expectations on the measurements, and my expectation is that they're doing that. So that's how it's done.

I'm not the one that's actually looking at XYZ contract by XYZ regional office. They all have their spending authorities within the budget that they're supposed to be responsible for. The finance department and the deputy monitor that. I ask the general question on a relatively regular basis to say: where are we at with certain things? That information is provided to me through the deputy minister.

B. Simpson: The point I'm getting at, though, is that I think it's a metric that the public needs to have. Across all of the various ministries, we did a significant downsizing. Again, anybody who's worked in a large corporation in the private sector will tell you that you get creep. You just come right back up again. You come right back up, whether it's adding to your own workforce or through contract services. So every five years you have to go in and do some housecleaning, because you just get creep.

In this case, as the minister well knows, one of the negotiating items with the BCGEU was no more contracting-out of the government services. I think from the public perspective, and certainly as the person responsible for engaging the ministry with respect to transparency and accountability to the public, I'd like to see those figures.

If the deputy minister is tracking those figures, then I think that's a report that the public would like to see. I would like to see a year-over-year breakdown of contractor services to the ministry relative to the FTEs, starting back in the 2001-2002 fiscal. Is that kind of report available?

[1635]

Hon. R. Coleman: The operating expense level is reported out through Public Accounts. We don't do anything in this ministry that we haven't done historically with regards to professional services that would have any difficulty with the BCGEU.

B. Simpson: I'm not sure what the last comment meant. The BCGEU was explicit publicly that one of their negotiating points in this last round of negotiations was no more contracting-out of their services. One of the concerns is whether or not the line services that are being done by individuals were jobs that were let go from the ministry.

The point I'm making is that from a fiscal management perspective, this is an item — and the minister

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has already admitted it — that you'd want to track. You'd want to know whether you made gains or whether all you've done is outsourced at a more expensive rate. Now, rather than paying a regular wage and benefits and pension, you're paying a day rate for consultants who try to accrue all of that into their day rate, and you can quickly run up a tab that's more expensive than if you had those people as employees in the ministry.

Again, my question to the minister is: how can I find that information? How can the public find that information — if, from the cuts that this government made to today, we haven't simply had creep and we haven't simply gone back up, but we've done it through contract services as opposed to FTEs?

Hon. R. Coleman: We do the best we can. I mean, the ministry has changed. For instance, we dropped recreation, which is now in another ministry, which affected an operational cost in our ministry. On the other side of it, we gained inventory because of what we took back on the takeback, and that affected what we do at B.C. Timber Sales. But as we've done that, we've always….

This has always been a ministry that has a certain amount of professional staff within the ministry and also has some professional contracts outside the ministry, depending on volume and what's going on in any specific year and what impacts the service plan on the land base.

If I can answer the question to the member as best I can, I am comfortable as the minister that I haven't had scope creep within this ministry in the last couple of years. I'm comfortable with how we're handling our contracts and how we're making sure that we're managing those within our fiscal plan in the manner we always have.

Frankly, I'm comfortable with my management team. As I've worked through the last ten months as a minister, as we've got to know each other, as we've understood how the ministry operates — how I can look at the historical side of the ministry as a ministry, look at previous service plans and finances and ask the questions — I'm satisfied that we don't have scope creep, and I'm satisfied that we're managing the ministry properly. So I'm comfortable with my management team and their performance at this point in time. On the best advice and information that I have, I believe that we're in good shape.

B. Simpson: Again, I'm glad the minister is comfortable. My job is to see if the public is comfortable. That's the question today in estimates. Is the public comfortable?

I'm not talking about scope creep. I'm talking about whether or not we have simply swapped out a bunch of jobs to contract workers who don't have benefits, who don't have pensions — whether or not what we've done over the last number of years, since what people in the union and the public call Black Thursday, is simply ramp back up again with a whole bunch of contractors. Quite frankly, again I state that we used to track this.

I'm looking at a service plan here that used to track — and it's not that hard — salaries and benefits by region and professional services by region. I'm not saying that we never use professional services. What I want to know is: what's the balance? Have we now simply switched out and have professional services costing us? As I look at the FTEs here, we're growing FTEs in a number of areas, and I want to look at those areas to see if they're appropriate.

[1640]

If we're growing FTEs and we're growing a whole bunch of contract services, I would argue that the cost of contract services often exceeds the cost of having somebody in your organization who's part of your organization, who helps to boost the morale of your organization, who works with the team in the organization — as opposed to having a bunch of contractors coming out and doing a bunch of bits and pieces that bolt on.

My question isn't whether the minister is comfortable. My question is: where can I get the information?

Hon. R. Coleman: First of all, we'll get you the numbers.

Secondly, you know, the member may want to refer back to Black Thursday, but we have a collective agreement with the BCGEU for four years. That certainly tells me that there's some proof in the pudding as well. If there weren't, we wouldn't have that agreement. If they were not satisfied with how we were going to operate and how we are operating, they wouldn't have signed a collective agreement for four years with government. We follow the collective agreement, to start with. That's number one.

Number two, within the agreement we use the business case analysis to determine the best delivery mechanism. That's how the ministry should operate, and there's no argument there with anybody with regard to that. We're happy to provide the numbers on the contractors. The member will actually find that…. He should look at it, when he does look at it, in light of the new roles and duties that have been adjusted as we've taken on B.C. Timber Sales and adjusted how the ministry operates. We're happy to provide the numbers to the member and have all the debates in the world about how many contractors we should or should not have, depending on what we're doing on the land base.

When the member looks at that and enters into that discussion, I would ask that he keep in mind the large increase we've had to deal with in the annual allowable cut in the interior of B.C. with regards to what pressure that puts on our staff and the number of staff we may have had to bring on, which may not have been appropriate in 2001 when the first business plan was written simply because at that time there was probably less of an understanding of the impact of the pine beetle.

B. Simpson: My first question was just: where can I get the numbers that led to the debate? I'd be happy to look at the numbers, and I will keep in mind what the

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minister has indicated. But I also, as I've indicated, have lots of experience in downsizing and watching the creep, and I think the public deserves to have some transparency and accountability on that.

Let's look at the FTEs then, since we're taking the contractors. Where we've got protection against fire and pests, the indication by all counts, as the minister has already suggested with respect to the snowcap, is that potentially we are going to see an increase in catastrophic fire events. We've got greater potential for fire — and we'll get into fire more explicitly — yet I noticed the protection against fire and pests flatlines in terms of FTEs post '06-07.

We also have significant pest issues, as the minister already indicated in his opening comments, well beyond the mountain pine beetle. My understanding is that the ministry was starting to look at