Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, MAY 28, 1997

Afternoon

Volume 5, Number 11

[ Page 3729 ]

The House met at 2:05 p.m.

Prayers.

G. Brewin: I would like the House to welcome Mr. Peter Wolters, director of finance and human resources of the Legislative Assembly of New Brunswick. Mr. Wolters has been attending the Financial Management Institute of Canada conference. It has been held here in Victoria. He is going to be spending today talking to employees of the B.C. Legislative Assembly. He is joined in the gallery by our very own personnel director, Mr. Rod Newman. Would the House please make them welcome.

R. Thorpe: I would like to welcome a guest, George Layer, a writer from Summerland. George is in the House today, accompanied by his friend Sydney Carroll of Victoria. I'd ask the House to make them feel very comfortable.

H. Lali: I would like to recognize today one birthday and one anniversary. Today is the birthday of the hon. member for Vancouver-Burrard. He is 52 years old. Would the House please congratulate him.

Today is also the first anniversary of the re-election of this glorious government -- it's exactly one year -- which ensured that we would be here on this side of the House for five years and that the Liberals would be on that side of the House for the next four years. Would the House please congratulate us.

I. Chong: Visiting us today is a constituent from Okanagan-Boundary, Mr. Jim Burch, a CGA who practises in Grand Forks. Mr. Birch is a longstanding member of a number of committees for the CGA association. Would the House please make him welcome.

Hon. S. Hammell: Sam Weller, a friend of mine from the Sunshine Coast, is visiting Victoria. Would the House please make him welcome.

G. Wilson: Another constituent of mine is with us, Mr. Bruce Milne, who is the newly elected mayor of the district of Sechelt. He is in Victoria working on the Sechelt negotiations. Will the House please make him welcome.

B. Penner: Seated in the members' gallery are two people visiting the province of British Columbia from the great state of New York. They are Joe Sullivan and Julie Kranick. Would the House please join me in making them welcome.

F. Randall: On behalf of the members for Burnaby-Willingdon and Burnaby North and me, I would today like to welcome to the House from the city of Burnaby, Bob Moncur, the city manager there, and Chad Turpin, who is the deputy city manager. They are both here attending a Municipal Officers Association convention being held at Victoria's convention facility. Both the member for Burnaby-Willingdon and I worked with both of these individuals while we were on the Burnaby council. Would the House please make them welcome.

Hon. C. Evans: If we were here tomorrow, I would announce the passing of half a century for my seatmate to the right. But since we aren't going to be here tomorrow, I'd like everybody to wish the member for Cariboo South a happy fiftieth birthday.

The Speaker: Members, you will have noticed on your desk a copy of a pamphlet entitled "British Columbia Legislative Assembly: An Introduction." I'm happy to advise that it is the first of what I hope will be a series of documents. I also feel the need to put on record that I resisted the blandishments of staff to put my picture on the front cover.

Oral Questions

USE OF CONSTITUENCY OFFICE

FOR FEDERAL ELECTION CAMPAIGN

G. Campbell: My question is to the Deputy Premier with regard to the Minister of Small Business, Tourism and Culture and the use of her executive assistant. Last Monday the Minister of Small Business, Tourism and Culture told this House: "All . . . actions that I've taken with respect to my constituency office have the explicit approval of [Mr.] Ted Hughes . . . conflict-of-interest commissioner." Today we know that there was no explicit approval from Mr. Hughes. Indeed, Mr.

Hughes is clear in a letter, where he says: "If members wish to quote my opinion in the House or elsewhere as authority for a position they are taking, they must have my written opinion in their possession." The minister had nothing from Mr. Hughes upon which to base her remarks. Indeed, the minister admitted that her executive assistant was involved in partisan activities.

My question to the Deputy Premier is: what actions does the government intend to take and pursue to rectify the breach of conduct of the Minister of Small Business?

Hon. D. Miller: I'd suggest that if any member of this House has a complaint involving another member, there are processes to follow.

G. Campbell: My question again is to the Deputy Premier. Mr. Hughes has explicitly said that he has given no approval for any actions with regard to the minister's constituency office. Indeed, she did not even ask him for approval of her actions. Yet on Monday she told us she had explicit approval.

The Deputy Premier is responsible for the conduct of this government in the absence of the Premier. The minister says there's explicit approval; the former conflict commissioner says there was no such explicit approval. My question to the Deputy Premier is: has he ascertained who is correct with regard to that?

Hon. D. Miller: Well, Mr. Speaker, you can correct me if you think I'm wrong, but it seems to me, in my ten years in this House, that there are explicit processes available to members if they feel that a member has done something they should not have done. There are explicit processes that are available to members to raise those issues, and I would suggest that if somebody's got a problem in that regard, they avail themselves of those processes.

G. Campbell: The Deputy Premier and, surely, the cabinet have some standards which they expect to be met in the province. Surely they don't always have to go outside and say to someone: "Did we do something wrong? Should we review this?"

[ Page 3730 ]

Has the Deputy Premier reviewed this activity, and has the Deputy Premier ascertained whether it is the Minister of Small Business or the former conflict-of-interest commissioner who is correct with regard to the matter of the minister's office?

[2:15]

Hon. D. Miller: I can assure the members opposite that if allegations were raised in this House concerning myself, for example, that I thought were outside the process, I would certainly avail myself of the privileged process that's available to all members.

R. Thorpe: On Monday the Minister of Small Business said in the House that the use of her constituency office in Ladysmith for the federal NDP campaign had been approved by the conflict-of-interest commissioner. I quote: "All of the actions that I have taken with respect to my constituency office have the explicit approval of [Mr.] Ted Hughes . . . conflict-of-interest commissioner." Mr. Hughes has reported today that this is simply not the case.

My question to the Deputy Premier is: will he tell us what action he plans to take against the Minister of Small Business for this misrepresentation?

Hon. D. Miller: I'm beginning to sound repetitive, but the member should be fully aware . . . . If there's a lack of understanding about the rules or the processes . . .

Interjections.

The Speaker: Members, order, please. I believe we had quiet for the question. Let's have quiet for the answer.

Hon. D. Miller: . . . perhaps you could, hon. Speaker, instruct members opposite on the use of those processes and rules. But if people have a complaint, then they ought to go to the appropriate process and follow it through. Otherwise, we simply come to the conclusion that there's a bit of a political play going on here, which doesn't amount to a hill of beans.

R. Thorpe: Obviously it's a very big political play over there.

Mr. Speaker, the Minister of Small Business has appeared to have violated the trust of her constituents. She has violated the trust of the former conflict-of-interest commissioner and the rules of this House. Will the Deputy Premier agree that the minister acted improperly and that she should be fired from the cabinet today?

Hon. D. Miller: Well, there's a lot of heat and fury here that doesn't amount to much.

As I say, if members opposite truly believe that they have something they want to pursue, then they should pursue it. There are processes available to them. Their failure to do so will be very loud indeed.

USE OF MINISTERIAL STAFF

FOR FEDERAL ELECTION CAMPAIGN

R. Coleman: My question is to the Minister of Small Business. Her executive assistant is paid out of her ministry's budget. That assistant, Doug Creba, is the former president of the Nanaimo NDP. He is based out of the Duncan constituency office, which was closed so that the minister's staff could work on the federal NDP campaign. My question is: can the minister confirm that her executive assistant has been on taxpayer-paid vacation to work on the federal NDP campaign?

Hon. J. Pullinger: My executive assistant is taking accrued holidays -- holidays that are owing to him, which he has earned. What he does with his holidays is up to him. Whether he goes to Hawaii or works on a campaign, that's his business.

R. Coleman: It's the use of her ministerial budget that is in question here. The Premier . . .

Interjections.

The Speaker: Excuse me. Members, order. I do want -- and need -- to hear the question.

R. Coleman: . . . stated that if any political staffers wanted to work on a federal campaign, they would have to take a leave of absence without pay. Did the minister ask the Premier's permission to depart from that edict to allow her own executive assistant to spend his taxpayer-paid vacation on a federal NDP campaign?

Hon. D. Miller: The Premier did say that if any political staff went to work, that would be documented and aboveboard.

But I'm a bit perplexed on that point, because I note that in 1988 in the city of Vancouver, the then mayor's personal assistant was caught issuing a news release from city hall. The telephone number was the city hall telephone number. I note that in 1993 the then mayor's political aide, Michael McDonald -- that's a familiar name; is he around these buildings now? -- was provided with a city hall office to work full-time on the mayor's leadership campaign. I also note that when the then mayor was confronted with these allegations, he dismissed those incidents and said that his staff were using their holidays.

I know that gang over there change their policies like they change their socks, hon. Speaker. But does that mean we should pay attention to them?

GUIDELINES FOR USE OF STAFF

IN ELECTION CAMPAIGNS

G. Farrell-Collins: What the Deputy Premier should pay attention to is what the Premier says and what the Premier says in the House, which is that anybody working on a federal campaign will be doing so as a leave of absence without pay. That's what the minister should be talking about.

Can the Deputy Premier . . .

Interjections.

The Speaker: Order, members, please.

G. Farrell-Collins: . . . tell this House how many other executive assistants, how many other ministerial assistants or how many other staff members from the members opposite are working on campaigns while on holidays?

Hon. D. Miller: I would repeat that the Premier said that any time off taken would be documented and aboveboard,

[ Page 3731 ]

and we'd be happy to provide that. I am intrigued on that point, because it does appear to me that if the opposition is trying to argue that Canadians should somehow be limited from using their individual vacation allotments, then it would be intriguing if they would get out on the road and perhaps argue that point with average Canadians, because I think they would be rebuffed absolutely.

G. Farrell-Collins: We're not making up these rules. It was the Premier who made up the rules and the guidelines. Yesterday the minister stood outside this House and said that she was following to the letter the guidelines the Premier laid down. Can the Deputy Premier stand up in this House and table those guidelines, and tell us how they differ from the edict issued by the Speaker?

Hon. D. Miller: Well, hon. Speaker, I guess all of us were . . .

Interjections.

The Speaker: Members, to coin a phrase, the clock is ticking.

Hon. D. Miller: . . . somewhat bemused when the leader of the Liberal Party attempted to explain the million-dollar mailer and the complete repudiation of all the excess of rhetoric that we continue to get from this group across the way. We do have an obligation, and it's not just the governing party. We have an obligation, as the Premier said in this House . . .

Interjections.

The Speaker: Order, members.

Hon. D. Miller: . . . that political staff working for a political party be well-documented and aboveboard. We are prepared to do that.

G. Farrell-Collins: I'll repeat the question for the Deputy Premier. Will the Deputy Premier stand in this House and table the guidelines that were issued by the Premier? Will he stand in this House and table those guidelines that were sent out . . . ?

Interjections.

The Speaker: Order, members. I'm sorry, Vancouver-Little Mountain. Members, I must hear the question. This is getting quite ridiculous, frankly.

G. Farrell-Collins: Will the Deputy Premier stand in this House and table the guidelines that the minister opposite referred to -- if, in fact, there are any? Will he tell this House how they differ from the edict that the Speaker made with regard to this issue?

Hon. D. Miller: I said we had an obligation to ensure that we do document the use of staff and to ensure that it is aboveboard. We are quite prepared to do that. Perhaps the Opposition House Leader might be prepared to advise the House, and beyond that, British Columbians, who made the decision about the million-dollar mailer, because I don't think that one ever came out yet.

C. Clark: Clearly the Premier told this House that there were guidelines in place, that things would be done aboveboard and that everyone would be aware of what was happening with staff during an election. But it means that we have to discover it in the middle of election. We have to raise it in question period again and again, and the minister has to go outside this House in order to actually answer any of the questions. Can the Deputy Premier tell us exactly what those guidelines are, what his standard for aboveboard is and why we didn't know about this before the election started?

Hon. D. Miller: I hate to see an opposition member standing up complaining that they have to raise something in question period. It certainly illustrates that in the balance of this sitting, at least, they've had some trouble deciding what to raise in question period. We have a responsibility -- and let me be clear . . . . I think this is the third time I've answered this -- the third time -- just for the record, so that everybody is clear. We have an obligation to inform the public about the use of political staff and to ensure that that was aboveboard.

Now, beyond that, beyond the allegations . . . . It's clear there is no substance, because there has been no formal complaint laid, and the refusal of members opposite to use the processes that are available seems to me to illustrate the paucity of their arguments. Perhaps this is entertainment before we leave for the weekend and get on with the federal election campaign.

The Speaker: The bell ends question period.

Petitions

P. Reitsma: I have a petition from 47 people in the Nanaimo area to the Legislative Assembly: "I've had enough. Stop the NDP's management of my tax dollars" -- with a couple of memorable quotes from the local MLA contained on the first page.

Tabling Documents

I. Chong: I ask leave to table a document.

Leave granted.

I. Chong tabled a document.

The Speaker: Mr. Clerk. Oh, I'm sorry, Okanagan-Penticton -- to table an afterthought? [Laughter.]

R. Thorpe: No, I've had the thought for some time. I've just been waiting for the documentation, but thanks for your concern, hon. Speaker.

I rise on a point of privilege. Having earlier today received a letter from Mr. Ted Hughes, QC, and . . . .

The Speaker: Excuse me, member, I'm going to interrupt you right now, if I may, and ask you to just take your seat for a moment. I know you're rising to reserve your right, but because this is a delicate matter, I wish to make very clear one point. Though I do not for a moment question my own ability to rule impartially on these matters, I think that impartiality, like justice, must indeed not only be done but be seen to be.

Therefore I am giving notice to this chamber that to hear the motion of privilege, to hear the member's right to reserve the right to raise a matter of privilege and to adjudicate on this matter of privilege, I have asked the Deputy Speaker to take over for me in that capacity. With the member's indulgence, then, I'm going to ask the Deputy to take the chair now to hear your comments.

[ Page 3732 ]

[2:30]

[G. Brewin in the chair.]

Point of Privilege

R. Thorpe: Having earlier today received a letter from Mr. Ted Hughes, QC, and this being my first opportunity to do so, I now wish to reserve my right to raise a point of privilege with respect to statements made in this House on Monday, May 26, by the member for Cowichan-Ladysmith.

Orders of the Day

Hon. J. MacPhail: In Committee A, I call Committee of Supply. For the information of the members, we'll be debating the estimates of the Ministry of Municipal Affairs and Housing. In this House, I call second reading of Bill 14.

ENVIRONMENT, LANDS AND PARKS

STATUTES AMENDMENT ACT, 1997

(second reading)

[The Speaker in the chair.]

G. Brewin: Hon. Speaker, I wish to make an introduction.

Leave granted.

G. Brewin: It gives me great pleasure today to welcome to the House a group of 73 grade 6 students and some adults, led by their teacher Mr. Moffitt. They're from Cathcart Elementary in Snohomish, Washington. Welcome, all of you. Will the House please make them welcome.

J. van Dongen: Hon. Speaker, I'm pleased to participate in this second reading debate on Bill 14. This bill deals with a number of amendments to a number of acts, but I'm going to comment on the issues revolving around two main areas. One is the amendments and the issues dealing with appeals to a number of pieces of legislation, including the Environment Management Act. I also want to comment to some degree on the amendments to the Pesticide Control Act, particularly from the perspective of agriculture.

In terms of the issues dealing with appeals and the rationale behind those changes, I generally support the amendments proposed. I think the decision by the minister to go from a three-stage appeal to a two-stage appeal, which in effect eliminates a management review within the ministry, is a good change. I'm a firm believer in effective appeal mechanisms, particularly for decisions made in regulatory areas. But I think there is also the possibility of a proliferation of appeals, where I don't think anything productive is added to the process.

So I think the minister is on the right track in terms of eliminating a management review. This is definitely more efficient, costwise. It shortens the time frames for an appeal to be heard, and it gets us immediately into an independent appeal process, which I think people expect.

I just want to make some specific comments with respect to appeals. As I read the bill, there are some variations possible, particularly with respect to the Pesticide Control Act, in terms of the time limit for people to file appeals. Generally there is a 30-day time limit for people to file an appeal once a decision has been reached on their particular issue.

One of the things that I would like to see generally -- I know it applies under the Pesticide Control Act, but I'm not sure it applies generally under the other individual pieces of legislation -- is that there should be an opportunity for the appeal board chair to review situations where the 30-day time limit has been missed and give people an opportunity for consideration.

One of the areas that needs further thought and discussion is not included in this bill, but it would improve appeal processes generally. That is, for the various decision-making bodies -- whether they're individuals, regulatory people or some of our civil servants operating under these various acts -- there needs to be more of a standardized and formalized process, whereby they set out the reasons for the decision, what the decision is and clearly inform people of the time limit for the appeal, their right to appeal, how to proceed on that, etc.

I don't think that necessarily requires legislative change. I think it can be done in terms of management policies that are implemented within the ministry for each group of civil servants that has responsibilities for these various acts. I think there has been a general problem in that area, because people don't always understand that they have a right to appeal, they don't understand there's a time limit, and they don't understand how to go about it. So that is one sort of general comment that I would make.

I have a concern about

section 2 of the bill, which speaks to

section 11 of the Environment Management Act. Subsection (14.1) talks about an appellant having to deposit an amount of money that the board "considers sufficient to cover all or part of the anticipated costs of the respondent and the anticipated expenses of the appeal board . . . . " I think that is quite a heavy-handed amendment

section to add. I support the amendments further down in the bill that give the board some authority in terms of costs -- to award costs at the end of an appeal. I support the conditions that give the board some leeway to deal with what they consider to be vexatious or frivolous appeals. I think those are good amendments. But I do have a concern about the potential heavy-handedness of the proposal for subsection (14.1) of that act.

I think it could create a situation where people with limited resources could lose their right to appeal. I know that this

section is at the discretion of the appeal board; hopefully, it will be used judiciously. But I just question the need and the propriety of having such an amendment in place. If the board has the authority to award costs, then that should be a sufficient deterrent for people to make sure that their appeals are not frivolous.

I guess I could go as far as to say that I've seen situations where at one time people didn't have a right to appeal but do now. I've seen situations where people had appeals and, clearly, costs should have been awarded against the regulatory body because of the kind of tedious, stressful and in some cases irresponsible processes that the individual citizen was put through. I recognize that may be a controversial amendment to suggest. I'm not going to suggest it as an amendment, but I raise it as a point to balance off the intent of the amendment proposed under subsection (14.1).

I also want to again reinforce my strong support of a good, effective, efficient appeal mechanism. From that perspective, I definitely support the general thrust of all of the amendments that the minister is proposing.

I suggest that for her thought and consideration -- I know this requires more discussion -- there are decisions in other areas of the Ministry of Environment, Lands and Parks that could do with some thought in terms of a better appeal

[ Page 3733 ]

mechanism than the ones we have now. I'm talking in particular about agricultural leases and other similar leases of Crown land to individuals or small business operators, such as we have in the freshwater fishery. We've experienced great difficulty in both those areas. What happens, in effect, is that the only appeal people have is to the minister herself -- or himself. I'm sure that the minister, just in her short time as minister, has seen some of the difficult situations that arise there.

In other situations where we've had amendments to legislation . . . . I'm thinking particularly of an amendment to the Health Act a couple of years ago that gave people an opportunity to appeal sewage applications on site. That has very substantially decreased the number of phone calls and the workload to senior Health staff and to the minister -- I was given by a senior civil servant the figure of 85 percent.

I have no doubt that it has resulted in a better process and a feeling, at least, that people have some avenue to go to that is, hopefully, neutral -- and in most cases I think it has been -- for a second opinion. I simply raise that with the minister as an area that is probably more difficult than some of the amendments she has proposed here but is probably an area that we need to think about.

I also like the aspect of an effective appeal mechanism, such as is being proposed. What I also like about it is that it's a form of accountability for staff. You only need to compare a regulatory regime where you have no appeal mechanism for people to go to and how that develops over a period of time, to a regime where you have appeal processes such as this in place. It provides one form of staff accountability that I think can be very useful for supervisors and managers.

It's interesting that if you study appeal processes in different jurisdictions, some staff are always involved in appeals, and other staff seem to be able to work out issues, subject to the legislation, more effectively and with less hassle and less cost. Again, I make that comment simply in support of the general intention and thrust of the amendments proposed.

[2:45]

I also want to just raise one thing. I mentioned the amendments made a couple of years ago with respect to on-site sewage disposal decisions. The amendments that were made to the Health Act at that time were, in my view and experience, not sufficiently broad to cover all of the decisions that the environmental health officers are making. We do have a number of individual situations that are not covered by the appeal mechanism currently in place in the Health Act.

I had hoped to see that amendment in this legislation, because most of the proposals made by the minister here were supported in the annual report of the Environmental Appeal Board, and they also supported an amendment to the Health Act. So I just wanted to mention that.

I have corresponded with the Minister of Health, and I've spoken to the Minister of Environment's staff about it. We're working with senior staff in the Ministry of Health to develop an amendment which, hopefully, we can include with this bill and that would accomplish the goal of providing for the small number of cases that are not covered by the current appeal mechanism. While the cases are small in number, in most of these situations the implications are very onerous and serious for the individuals involved.

I've studied a lot of these cases, and I simply cannot agree with some of the decisions that have been made by staff. I think that if there was a proper appeal mechanism, that would help deal with the situation.

Now I want to just turn to the issues revolving around the amendments to the Pesticide Control Act. These issues are mainly covered in sections 5 and 6 of the bill. The first thing that I want to mention to the minister is the concern expressed by the stakeholders, particularly some in the agricultural community. Just to refer to two letters they wrote to the minister . . . . They were surprised by this legislation. They weren't consulted on it. Possibly the minister and the ministry staff felt that previous consultations on previous legislation was sufficient.

I simply put on the record the concern that there was no discussion about this bill with people like the B.C. Fruit Growers Association and the B.C. Horticultural Coalition. Hopefully, any amendments to regulations that emanate from this bill, for example, will be discussed with them prior to those happening. I just wanted to mention that.

I'll just quote from the May 7, 1997, letter from the B.C. Horticultural Coalition. I think it sums up their concern very clearly:

"This bill contains many of the elements of the earlier environmental protection act. At that time, we raised the concerns that the bill would place unrealistic demands on our industry, increase regulations and ultimately raise the cost of doing business in British Columbia. Our industry would be placed at an economic disadvantage to our competitors. The results would be lost jobs and the contribution we make to the provincial economy."

That probably underscores and explains some of the serious concerns that horticulturalists in particular have raised about this bill. I wanted to mention that, because it's important to understand some of my subsequent comments from that perspective.

Section 5 of the bill introduces two new

definitions: integrated pest management and pest management plans. This is really the source of the concern from agriculture. The way the bill reads, there is nothing that exempts them from the need to either have a permit or a pest management plan.

We're speaking now to what's proposed for

section 6 of the Pesticide Control Act. I know there has been a fair bit of discussion back and forth that we've been involved in. Certainly there has been consultation with the Ministry of Agriculture, and I was pleased to see that. I was also pleased with the representations that the Ministry of Agriculture made to the Ministry of Environment on behalf of the industry. There has even been some work done by the minister and her staff since the first time second reading of this bill was talked about.

I just want to indicate that I'm pleased to see that the minister did introduce the consequential amendment to the actual regulations, which attempts to clarify as clearly as possible that there is no intent to remove the existing exemption that agriculture has from the need to have a permit, as set out in this

section of the proposed act, or an approved pest management plan. I think that that certainly meets the concerns partway and, hopefully, will give the industry sufficient assurance. I think that amendment, together with ongoing consultation on changes being contemplated in regulations, will be a good thing.

With that, I guess I could make other comments about some of the specific parts of the bill, but those are the two areas. The appeals are certainly very much in the right direction; there are some specifics that I would like to continue to work on with the minister and the Minister of Health. My comments on the Pesticide Control Act were just to register some concern about consultation and to register real concern that the need for filing integrative pest management plans not be expanded to include people like greenhouse operators and other farm operators. That would create, I think, some very horrendous requirements, particularly when integrative pest management plans need to be modified.

[ Page 3734 ]

I know that a lot of agriculture has very significantly reduced the use of pesticides, herbicides and other chemicals. I know that the greenhouse industry in particular aims to manage their pests with absolutely no pesticides, but there are times when they need to do it on an emergency basis. I think that if they were subject to this legislation, it would create some difficulty.

As I understand these amendments, the intent is to help put in place longer-term pest management plans that will reduce the need to issue permits on an annual basis, with significant cost and bureaucracy. I think that from that perspective, I do support the amendments proposed.

G. Farrell-Collins: I ask leave to make an introduction, if I may.

Leave granted.

G. Farrell-Collins: Earlier this afternoon a group of 40 students, parents and teachers from Vancouver Talmud Torah School in the riding of Little Mountain were here in the House. They were here during question period; I didn't expect them quite that early, but they were here. They're now out having a tour of the Legislature. I would ask that if members run into them in the hallway, they make them feel welcome here in Victoria.

J. Wilson: I feel compelled to say a few words on this bill, and I'll try to go through it in some type of order. Under the Environment Management Act, the appeal board which is being set up . . . . No doubt there's some streamlining here; however, I feel it is important that we keep in mind all of those out there who may be affected by an appeal. If you're a small operator or an individual, this has the potential of restricting your ability to be heard if you're forced to put up a bond or a sum of money that will cover all costs that will be incurred by the board or through the hearing.

When we go through a civil or criminal court, we're not required to post the cost of the court proceedings before we're allowed to be heard. I realize that this is written into a lot of legislation and that this is the way it is done, but to me, it is an infringement on the rights of the individual.

My understanding is that some amendments to this act will be presented with regard to the application of the act on private property. Although I haven't seen the amendments, I believe it is necessary to take all . . . . What I read here is that anything related to Crown land, or leases in some cases, may be required to follow the requirements in this act. However, if it's applied to private property without some changes, it would have a very detrimental effect on the agriculture industry, not only in crop production but in the horticulture industry as well. They rely heavily on herbicides and pesticides in order to be able to have a product to market.

The

section that deals with integrated pest management is very complicated. It's something that most people in agriculture would not have the ability to deal with. They would have to hire a consultant group in order to put it together. It would have some harmful impacts on the industry.

In some places there is some wording that I feel should have been changed. In

section 6, you cannot " . . . apply a pesticide to a body of water or an area of land . . . . " The exception there should be private land, not just land.

The time of notification to an appeal board may work in most cases, but there are areas in this province where people work in places that are somewhat remote. To decide that sufficient notice is the fourteenth day after you have deposited a notice with Canada Post does not work. If you live in a remote area, very often you're busy working and you don't have time to pick up your mail every second day, let alone every week. Sometimes you may go three or four weeks without collecting your mail, especially if you have to drive 100 miles to get it. Something else should be put in there.

Maybe this works fine where you have daily mail delivery and people can access their mail on a daily basis, but in other cases you may want to deliver a notice by hand.

[3:00]

Under

section 24 of the Pesticide Control Act -- and we're dealing with

section 16 of the new act -- I see that considerable leeway has been granted to the managers to establish requirements and standards of competence for a person to obtain a licence, certificate, permit or approval. They can prescribe the fee for application, examination and training programs required under the act, and prescribe fees to be paid in respect of services provided by the government in relation to the assessment of an application or permit. Will this be cost recovery, or will it become a revenue-oriented process?

The other question I would have to ask here is: do these sections refer to pest management people using pest management plans, or will it be a broad-brush application and cover all of those people who are involved in agriculture and are working within the confines of their private property?

There should be an additional

section in the amendment. If the amendment comes in, there should be something in there that will allow certain people exemptions from these rules. It could end up being another burden on the backs of people that can ill afford additional costs.

There is another

section under

section 36(3)(

i) of the Waste Management Act. I believe the intent of this . . . . It deals with permits, and they can be cancelled within three years after issuance of the permit, or after failure to comply with the permit. I feel that is a pretty hard and fast rule. Somehow I have a feeling it's tied into solid waste management, and it may have some consequences for the regional districts around the province. In some cases, you could see a considerable tax increase if their permits are cancelled after three years, if they are unable to comply with regulations which have come into place.

Before I get to appeals . . . . Under the Environment Management Act, authority under the appeal board, there should be something in there that will give the appeal board authority to dismiss an appeal on a

summary basis, in some cases. If they decide that this is frivolous, abusive or otherwise without merit, there's no need to go any further on it. And they should be able to throw it out and not have to worry about spending taxpayers' money or an individual's money, or whatever. It would save time and save costs if they could determine where it's going in the beginning.

Another point is that they should be able to make a decision if an appeal relates to a permit issued under the Waste Management Act and that permit complies with the regulations, standards and policies of the Minister of Environment. Appeals that would come in there have already been approved under permits in the past, so there shouldn't be any need for hearing appeals in those cases.

Section 24 deals with the Water Act: "An order of the comptroller, the regional water manager or an engineer may be appealed to the Environmental Appeal Board established

[ Page 3735 ]

under the Environment Management Act by" -- and it goes on to list the persons who might be subject -- " . . . (

b) an owner whose land is or is likely to be physically affected by the order, or (

c) a licensee, riparian owner or applicant for a licence who considers that their rights are or will be prejudiced by the order."

The question I would ask is: is this clause put in here for some other legislation which we haven't had a chance to talk on yet? Are there other implications that are not being explained? Because it would appear they're anticipating a lot of problems by including this in a bill before the problems arise. Is there more legislation coming in other bills that is going to be a potential threat to a lot of people, and is this a way of dealing with it before the fact?

That pretty well sums up all of the concerns I have with it. I would have to say that if this bill can do what it's intended to do, which is streamline the process, cut down on the paperwork and make things more workable, that is what we are all aiming for, I think, at this time. With that, I would like to close.

The Speaker: Seeing no further speakers, I call on the minister, whose remarks will conclude the debate.

Hon. C. McGregor: I'm certainly pleased to respond to some of the concerns that have been raised by the hon. members of the opposition in regard to this act. But let me first say that I am very pleased to hear the broadly based support from the member who's just spoken, as well as from others, on a number of matters.

The first is the principle of integrated pest management and their support for this as a principle of good public policy in how we manage pesticide control. I would agree with them. I do believe that integrated pest management planning, in the instances which this act is designed to cover, is indeed good practice and policy, and will create greater efficiencies for all of us within government and for those who must also appropriately manage these chemicals.

I noted with interest the comments of one of the members on the other side around spill response and, in fact, her support for the polluter-pay principle. I'm certainly pleased that the opposition does support that principle, because indeed it is one that we promote in multiple policies and legislative frameworks within this ministry.

Certainly I note with some of the same level of concern the issues related to appeals. And not to draw attention, necessarily, or to be difficult about the matter, but I did hear two different points of view expressed by members of the other side. On the one hand, I heard some of the hon. members suggest that the appeal process must be designed in such a way as to make it easily accessible for all members of the public because they should have an ability to have an appeal heard. On the other hand, I also heard members suggest that we should be able to summarily dismiss some of those appeals if they're viewed to be frivolous or causing some harm to the legitimate applicant.

Trying to balance those two issues is indeed what the appeal process is designed to do. The act does go to the point that the individual is given the opportunity for an appeal. I appreciate some of the comments others made about the formality of the appeal process and how some applicants may feel that that makes the appeal difficult to access, but I want to assure those members that, as much as possible, the environmental appeal agency makes this process as simple as possible.

It's meant to be informal in nature, and in fact many appeals are dismissed through an informal mechanism or a mediation process prior to an actual hearing. There's certainly no intention that people who want to be a party to an appeal should have to have a lawyer to be able to engage in those appeals. That certainly isn't the practice, and it certainly isn't what the legislation has in mind.

On the matter of deposits and the ability to assess costs, again I heard two different points of view from the members opposite. There is a concern, and one that I would share as well, if there were a requirement to pay a deposit up front in the case of every applicant. I just want to assure the members opposite that that is indeed not the case.

The environmental appeal agency has actually only used the deposit provision once, and that was after an applicant had not shown up for two hearings. So the Environmental Appeal Board assessed a deposit, and then the person who was launching the appeal determined not to continue with the appeal. Obviously, it's meant to be used as a tool and a mechanism to avoid frivolous appeals. Certainly I know the members opposite have concerns as well that the process not be one that is abusive in any way.

On the issue of the Pesticide Control Act, I do appreciate the comments of the members today in that regard. Of course, it was as a result of the consultation we had with members of the opposition prior to the introduction of the bill that we recognized the concern they had raised about the need to introduce an amendment to the act to make it clear that the Pesticide Control Act was not meant to apply to farmers.

So I have the intention of moving the amendments that have been introduced in my name on the order paper, when we get to those sections of the bill, to make it abundantly clear to the members opposite and to the agricultural community that it was not meant to capture them, that they are currently exempt from the need to apply for a pesticide permit and that that exemption would continue.

There were some concerns, I believe, raised around the issue of appeals under the Wildlife Act, and there were concerns, really, about the adequacy of the expertise on the board. Certainly for that member, I'd be quite happy to share the biographies of those members who are on the Environmental Appeal Board so that she can see the full range of their expertise and see that there is an ability for the person who has applied for the review, as well as for the individual who is representing the ministry, to call expert witnesses, if that is indeed a necessary part of the appeal process.

So I do want to assure the members opposite that there is a recognition that specific expertise and detail is often needed to bring forward these appeals, and in that case we do.

[3:15]

I think, finally, there were a number of concerns raised around the Land Act, and I know there is a subsequent amendment being raised. It's also on the order paper as a result of the renumbering of the act. I thank the member who brought that matter to our attention as well, and we will move that at the appropriate time, when we get to third reading.

There was a concern about the appropriateness of moving the responsibility for the Crown land registry. I'd like to reiterate that this responsibility has been transferred to the director of Crown land registry services from the surveyor general, who now reports to the director. And as the director is not a statutory office, we cannot vest responsibility with that person without making greater changes to the act. Those changes would not be warranted, because future reorganizations may assign the responsibility elsewhere. I will delegate

[ Page 3736 ]

the responsibility for the Crown land registry to the director of Crown land registry services once these amendments come into effect.

In closing, I'd just like to thank the members opposite for their diligence and their interest in this act and, in fact, for their support on a variety of the principles that this act is designed to do. At this time, I move second reading of Bill 14.

Motion approved.

Bill 14, Environment, Lands and Parks Statutes Amendment Act, 1997, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. McGregor: I call committee on Bill 9.

I note that the minister responsible is on her way, I believe, so we can just take a very short break while she joins us in the House.

The Speaker: We will do that. Before I call the committee Chair, I recognize the member for Burnaby-Edmonds.

F. Randall: In the gallery this afternoon we have approximately 50 grades 5 and 6 students from Second Street School in Burnaby-Edmonds. They are accompanied by their teacher Ms. Loraine Hodgson and a number of other adults. There's one adult I see there who was very active in my campaign and helped us get elected -- Joane Fry. Would the House please make them welcome.

TOURISM BRITISH COLUMBIA ACT

( continued )

The House in committee on Bill 9; G. Brewin in the chair.

section 6 (continued).

Hon. J. Pullinger: I would just like to begin by introducing once again my staff, who are present here today. On my left is Lyn Tait, the deputy minister. Seated behind us is Rod Harris, the CEO of Tourism British Columbia. With that, I turn it over to members.

G. Wilson: With respect to the issue at hand here, I understand that a lot of what is proposed in the language might be deemed to be somewhat boilerplate in terms of the creation of a Crown corporation, and therefore that much of it is taken from the Company Act and previous acts that relate to Crown corporations in terms of its structure.

However, because of the nature of this Crown corporation and how it is going to be funded, and the extent to which -- and we canvassed that in earlier sections -- this Crown corporation may in fact impose upon people who are involved in the tourism industry a possible source of taxation -- or, if not, fees -- I think there is an opportunity there for Crowns to make that imposition as a result of the requirements that this act will put in place.

I note that under

section 6, not unlike many other Crown corporations -- in fact, most Crown corporations -- this one will be allowed to acquire, hold and dispose of property. It will also be allowed to borrow and invest money. Now, it's important for us to know what the minister has in mind with respect to the borrowing powers of this Crown corporation, because this is a corporation -- as we will find out later when we take a look at the special levy that will be made with respect to the Hotel Room Tax Act -- that will be funded, in large measure, through the moneys that are coming out of a proportion of the hotel tax.

Yet if this corporation incurs debt, which it is clearly able to do, the question is: where does the liability on that debt fall in the event that this Crown corporation requires additional or extended revenues to cover the service of that debt? It's expensive to borrow money, as the minister well knows. I'm curious to know what the minister has in mind with respect to

section 6(

b) in terms of the borrowing capacity and powers of this Crown corporation.

Hon. J. Pullinger: The borrowing powers are fairly standard. They are there for things like lines of credit and so on, as the Crown corporation sees fit, if that answers your question.

G. Wilson: I wonder if we can try to be a bit more specific than that. B.C. Ferries is a Crown corporation. It went to cabinet last year, and it got approval to borrow $800 million. That's a lot of money. Somebody has to pay it back, because it is a Crown corporation we are all responsible and liable for, and we're all going to have to carry its debt. The taxpayers of British Columbia clearly have to be quite conscious and aware of how Crown corporations are chartered, within the concept under which they are struck, and how they will be allowed to borrow.

I wonder if the minister can tell us more specifically the ceiling or the amount of borrowing that is anticipated for this Crown corporation. Are there guidelines that will be provided, or are we going to have to wait for this business plan that the act calls for before we'll know how much increased debt this Crown corporation is likely to place upon British Columbians?

Hon. J. Pullinger: Right now it's hypothetical, if we're talking about specifics of borrowing, but there are two points that I think may help the member. One is that this corporation will clearly function in a very similar fashion to any business enterprise. It therefore requires, as I mentioned, some kind of borrowing flexibility for a line of credit or other things to enable it to maximize its business opportunities, which is why the industry very much wants to have this kind of flexibility.

The other point, and the concern I think the member is alluding to, is about accountability. He's correct. The future plans will be laid out annually in a business plan that is mutually approved. It will be a public document. Also, any borrowing, accrual of debt or anything of that nature is governed by the Financial Administration Act. The Ministry of Finance would therefore be the fiscal agent, and that kind of activity would be undertaken through the Ministry of Finance.

G. Wilson: All right. I guess one of the things I'd like to know, given that there is a very specific understanding of the funding base for this corporation -- and it's established within the act -- is if the minister anticipates that the government would restrict its borrowing to the annual value of that funding allocation. If it doesn't do that, then essentially, this is really establishing another Crown corporation that can greatly increase the debt load British Columbians are going to have to face.

Hon. J. Pullinger: I can't comment on the hypothetical questions, because they are hypothetical, but clearly the corporation

[ Page 3737 ]

will be required to put together its budget and its business plan, and it will be expected to live inside its funding sources.

G. Wilson: I'm really not trying to be argumentative here, and I'm not trying to deal in hypothetics. I'm trying to find out what was specifically intended in terms of borrowing powers when the act was drafted. We know, as is boilerplated in most of these acts -- notwithstanding the Financial Administration Act -- that Treasury Board has the provision to control or limit expenditures, but it also has the ability to accept expanded borrowing, as it did last year with B.C. Ferries to the tune of about $800 million.

Now, the fact that it's able to borrow and invest money suggests that this corporation is going to be able to act -- as many do -- almost like a corporate entity that is chartered quite independent of government revenue, even though the funding source is tied.

So I'm not trying to be argumentative; neither am I trying to be hypothetical. I'm trying to find out at the time we're introducing this legislation whether or not it is anticipated that there will be a ceiling on the amount of borrowing available to this Crown corporation. Is that anticipated in this bill?

Hon. J. Pullinger: I think it would be helpful to the member if I was to elaborate a bit on the kind of borrowing that I expect may be undertaken by the corporation. The reason for creating the corporation, of course, is to provide a little more flexibility and to allow this marketing agency to respond more flexibly and readily to marketplace circumstances and needs as they arise. I would expect that the kind of borrowing this corporation may engage in would be primarily along lines of credit -- that kind of borrowing -- for things such as . . . .

If there was a business opportunity coming up six months down the road, and for business reasons they needed to deal with that now but the full funding wouldn't be available until later, the corporation might in fact take advantage of a line of credit to engage in that business activity. The line of credit would be paid off as the money came in. That would be a hypothetical example.

Essentially, it's so they have the ability to flatten out the normal peaks and valleys of funding and expenditure. In the marketing business, timing is everything. They need to be able to respond seasonally and in accordance with opportunities to market this province.

That's the intent of it. I don't expect that there would be other kinds of borrowing. That's the kind of borrowing I would intend. It's certainly fiscal management borrowing on a line-of-credit basis. And, no, there isn't an explicit ceiling. That would have to come with a business plan, and it would be dealt with at that time.

[3:30]

G. Wilson: The last comment answered the question I was trying to get at. Essentially, there is no ceiling. I mean, any line of credit that's established . . . . I understand how a corporation has to work. But whether you're a corporation or an individual, if you establish a line of credit, you are essentially borrowing money. In that process there is generally a limit to how much you will be permitted to borrow, so limits are established.

That limit is usually tied in some way to revenue -- how much you've got coming in -- because the lending institution, whoever that lending institution may be, isn't likely . . . . If it's a bank, they won't take any risk at all. If it's the government, they're likely to take a lot more risk if it promotes government programs.

What I was trying to get at is whether or not there's a limit. What I'm hearing is that there are not any borrowing limits anticipated on this Crown corporation, and that's what I was trying to establish.

If that's the case -- and I read it that way, hon. Chair -- then the next concern I have is under

section 6(e), which says you can "incorporate subsidiary corporations, with the prior approval of the Lieutenant-Governor-in-Council." Now, the trend in Crown corporations at the moment, as a matter of public policy, has generally been to move to what are called commercial Crowns; i.e., self-funding, self-perpetuating, self-paying. If we're going to have Crown corporations, that's probably the better way for them to be, generally speaking.

I want to come back and use B.C. Ferries as another example. B.C. Ferries incorporated a subsidiary whose sole purpose was constructing and selling aluminum catamarans. That provided a marketing agency that allowed B.C. Ferries the opportunity to greatly expand its debt load as a result of the increased borrowing it was allowed.

With the creation of this Crown corporation, given the fact it is going to be so directly tied to tourist promotion and marketing in the province -- something that is very competitive, something that is going to require a great deal of effort and energy -- I'm concerned that we do not create a government-funded, government-supported agency which will directly compete with individual agencies who are already in the business of tourism promotion and do so with government subsidy and an unlimited restriction on borrowing.

If we do that, government becomes the tourism promoter, not the people who are involved in the industry themselves. As a matter of public policy, that's not a good idea. I'd like to hear the minister's thoughts on that.

Hon. J. Pullinger: There are a number of questions that I'll attempt to address. First, I simply want to reflect back to the member's comments around borrowing and ceilings. Those kinds of arrangements . . . . I just want to be very clear that lines of credit would be established through the Ministry of Finance, in accordance with overall government policy and budgets and so on. It would be reflected in business plans, etc. I just want to be very clear that the corporation will determine those issues in future as it needs to and will do so through the Ministry of Finance.

I would imagine that any requests would be to do with their realistic needs. I'm not being deliberately vague, but it's a future issue. The accountability, the process, the business plan, is there through the Ministry of Finance. I want to be very clear about that.

Secondly, unlike the B.C. Ferry Corporation, this corporation has a very narrow focus and mandate: it is a marketing agency. I therefore don't anticipate that it will have anything significant in the way of capital expenditures or that kind of

[ Page 3738 ]

expenditure. Its function is to take the funds, the $18 million-plus funds this year -- and that amount will grow as the industry grows -- to use to market British Columbia in a variety of ways. It's a very clear, very narrow mandate.

The issue of competing with existing advertising agencies and so on -- that's not the case. I imagine they would use advertising agencies for different projects, just as government does. This is, in fact, the model that industry has wanted for quite some time -- a couple of decades that I know of -- whereby industry has the primary voice within the context of government about how this marketing takes place in British Columbia.

That would be their mandate: not to market any one individual business or enterprise, but rather to market British Columbia, the regions of British Columbia, and the sectors such as . . . . We have accommodations guides; we have golf tour guides, etc. Their mandate is the very broad-brush-stroke mandate: to market this province, to attract people to come here, to encourage them to move around in the regions, and to encourage them to stay longer and spend more money here. So that's their mandate.

G. Wilson: I guess we can explore this matter of borrowing in a little bit more detail under

section 11. Unless, of course . . . . I don't know if it's in order, but since we have the very creative and talented Minister of Finance with us, he might want to tell us how much he's prepared to lend this institution.

Let me come to the last question I had on

section 6. Again, it has to do with making sure of our ability to make sure that people in the private sector who wish to involve themselves in the tourism promotion of the province are not constrained from doing so if they are not blessed by this new Crown corporation. The concern I'm hearing from people in the industry is that this is going to become a closed shop, and if you want to succeed in British Columbia tourism, you're going to have to succeed through a very close adherence to and be tied to this corporation, or at least have representation on it.

I know what's anticipated in terms of the broad range of people who will sit on the board, and I don't take issue with that. But I do take issue with small ma-and-pa operators, whether they're bed-and-breakfast operators or people involved in very small industries, who will not directly have representation and who may find that they can't have their names included on these brochures or in these broad-based marketing agencies unless they're connected into this corporation.

So where it talks about negotiating into agreements, I'm hoping that doesn't mean that small ma-and-pa operators -- people involved in rural British Columbia who just want to run a small tourism agency -- are going to be prohibited from having access to moneys they might ordinarily get now unless, of course, they toe the line or pay a fee or in some way become locked into this corporation. I think that's a very real concern, because an awful lot of the people in British Columbia who make their livelihood from tourism do so as a family operation, not as a broader business or corporate enterprise.

Perhaps the minister can comment on that.

Hon. J. Pullinger: Good points. I share the concern that there's broad representation and that the little operators are able to have a voice and are treated equitably. I am sure the member is saying that with the understanding that in some regions of the province the industry tends to be much more on-the-ground, grassroots, smaller mom-and-pop than it does in others.

The reason for the structure of the board -- which has been the subject of some considerable debate outside this House as well as in -- in which there are nominations from industry . . . . Ten seats will be nominated, in one way or another, through industry, through processes to be determined by an MOU -- the initial one will be signed shortly -- and thereafter by the policy and bylaw of the board. So there are ten industry seats, and then there are five government seats.

The reason for that makeup is to ensure two things. One is that there is significant representation from industry on that board. It's because of the nature of this Crown agency. In my view it's imperative that the overwhelming majority, if not all, have some connection with tourism and tourism marketing and the tourism industry, etc., which is very broad, as the member knows. The other reason for that particular makeup is to ensure that there is diversity. That is explicit in the act. I was adamant that it be in the act, and it is absolutely in line with other things that our government is doing.

So in terms of it becoming a closed society, that's not possible. There will be limitations on terms. Certainly, I as minister will make every effort to make sure that some of those small community-based voices are included on the board, as well as regional voices, men and women, visible minorities, etc. -- everybody who has something to contribute from different perspectives.

Essentially, there's a huge amount of effort going into making sure, maybe for the first time, that it isn't a closed shop. It will be more open than it's ever been, and more inclusive. Certainly if people have concerns about the board, they have all of the normal political responses, through your office or mine or directly through the ministry -- however -- to air those concerns, and they'd certainly be considered.

I. Chong: The questions I have on

section 6 relate to some of the questions perhaps already posed by the member for Powell River-Sunshine Coast. If I risk being repetitious, I hope the hon. minister will indulge me.

The first part, subsection (a), "acquire, hold and dispose of property," I guess causes some concerns for those people who are looking at this Tourism Act to ensure that the corporation, once established, does in fact hold to the purpose of marketing tourism. However, when it gives the broad powers of this corporation . . . . When this act allows and empowers this corporation to "acquire, hold and dispose of property," that can broaden the marketing that this act was intended to do, and it may broaden the mandate of this particular act to the detriment of marketing.

[ Page 3739 ]

[3:45]

The reason I say that is because the board may deem it necessary to acquire certain property. It may make some poor investments and hold those and subsequently dispose of them. In doing so, if it is empowered to do that without some form of control by the ministry -- what I'm looking for is whether there is that link with the ministry -- what might that possibly do to this corporation?

The suggestion is that it may look into some capital asset acquisitions that it thinks may be necessary for marketing, find that it was a poor investment, and then subsequently dispose of that at a loss -- a loss which is basically being funded by the revenue that's allocated for marketing. How would those kinds of things be dealt with? Where is the recovery for decisions that could cause that potential loss of the funding meant for marketing? Perhaps the minister can offer some comments.

Hon. J. Pullinger: I think I understand the member's question, and I will address it. It seems to me that the member is concerned that this corporation will get into investing to make additional funds to then market with. That is not within the mandate of this corporation. The intent of this part of the legislation is to allow the corporation very simple things, like its own lease, for instance. For instance, it has to have the mandate, under the legislation, to acquire, hold and dispose of the property that it houses itself in. So its own lease would be covered by this

section of the act.

Apart from that, I think the primary use for this ability would be for intellectual property such as trademarks. This

section would give the corporation the right, as I mentioned in an earlier part of this debate, to put a Tourism British Columbia trademark logo on a hat. They own the intellectual property of the logo. They can put it on a hat and sell that hat to increase revenues to the corporation, if they so choose. I anticipate that that would be the primary kind of property dealt with here, other than its own lease. Anything different from that would have to be dealt with in a business plan in advance, and at that time it would have to be demonstrated that it's within its very narrow marketing mandate. So I anticipate there will be little, if anything, else.

I. Chong: So what I'm gathering from the minister is . . . . Again, that does become sort of hypothetical as well -- that we assume that the only thing this corporation may be dealing with is intellectual properties. That seems to make sense, but my concern is, as I gather from other members, that there may be other kinds of property. I suppose if it were that simple, why would we not ensure that that would be included in this act? Because, you know, in "acquire, hold and dispose of property," there is very little definition there to provide any kind of comfort.

If the board goes beyond what was intended, not having had the benefit of this particular debate, how would we then be able to ensure that the interests of the taxpayers of this province have been properly dealt with, with this marketing?

Hon. J. Pullinger: The constraints are thus. Under

section 6, one constraint is: "For the purposes of this Act." In other words, (

a) to (

f) can only be undertaken to carry out the purposes of the act, which are quite narrow. Another constraint would be the business plan, which must be approved by me. A third constraint would be that anything to do with borrowing, accrual of debt or anything of that nature would be done through the Ministry of Finance. That would be another constraint. All of that, of course, would come within the larger budgetary and policy framework of government. It's actually quite constrained, both in the wording of the act itself and with the external constraints.

I. Chong: I thank the minister for that. It does explain it a little more. As I go through all these sections, I see we are deferring a lot of debate and discussion for the business plan, and that probably will be a fairly extensively debated section.

The other thing I want to move on to in this

section is (b), the borrowing and investing of money for the purposes of this act. As the minister responded to the member for Powell River-Sunshine Coast, her anticipation would be that the borrowings would be limited, as would be the investing -- the borrowings, in particular, being restricted to perhaps a line of credit situation.

I would like to canvass that a little bit further and ask the minister: if a line of credit were established and were permitted to allow for an acquisition of perhaps another intellectual property or whatever, which didn't perhaps produce the revenues it was intended to produce, thereby creating a loss or a deficit . . . .

I'm wondering whether the minister is able to advise how that would be treated -- whether the creation of a deficit situation may occur at the end of a particular year because the borrowings resulted in a greater expenditure than the tourism revenue dollars they had anticipated, whether that deficit is permitted to exist within this Crown corporation, carried into another year, and how that might impact on the accumulation of debt in this province.

Hon. J. Pullinger: I appreciate the member's concern. As she expressed, it is hypothetical, so I'm not able to give anything by way of a very concrete answer. However, I can say this: the corporation will be expected to live within its budgets. I do not expect it to be engaging in ventures of a high-risk nature. That's not the nature of the business that takes place currently. I don't expect that will change.

I expect that if borrowing takes place, it would be, for instance, to meet seasonal obligations. The budget starts April 1, and the tourism season starts very quickly thereafter. If the corporation wanted to enter into an agreement with some agency to undertake a massive marketing initiative for something or other -- your imagination could fill in the differences -- they might want to borrow that money in April in order to have the marketing when it matters -- i.e., before the tourism season. Similarly, they might want to do it in January, at the end of the fiscal year when they're running lower -- whatever.

But those are the kinds of things, just to deal with the humps and valleys of the realities of the business world, which I know the member is also familiar with. So those are the kinds of borrowings that I expect. But overall, the corporation will be required to undertake initiatives that will not result in loss to the taxpayer or in it going outside its approved budgetary confines.

I. Chong: That does explain it somewhat. I appreciate the minister looking at it from the borrowings that may occur at the beginning of the season, where you expect the revenues to come in. Also, the fact that she mentioned that if the corporation were to borrow in January, February -- and that's where I'm leading to . . . . If borrowing occurred in January or February for a line of credit reason, in anticipation of the revenues that it's meant to match against until the end of March . . . . If those revenues didn't materialize, then clearly at the end of the fiscal year we would have a situation where there could be a deficit.

[ Page 3740 ]

I'm wanting clarification from the minister as to whether or not that deficit may be allowed to occur in this particular Crown from one year to another. If you budgeted $18 million of anticipated revenues to come in for 1997-98, for example, and your expenditures were $18 million . . . . If you'd anticipated it to perhaps exceed that and you'd borrowed on a line of credit to assume that, and it didn't materialize, clearly there is a deficit that occurs at the fiscal year-end. Is this Crown corporation permitted to have that? How many years are you allowed to allow this to flow from one year to another?

Hon. J. Pullinger: The board will be expected to govern itself in such a way that throughout the fiscal year, it lives within its means. If the board determines that it needs or wants at some point during the year, whether in month one or month nine or whatever, to undertake something that requires some advance funding that it wants to borrow, it would have to be certain, as much as that is possible, that in the next month or two or three -- whatever it has -- it would be able to meet the deficit it had accrued. In other words, it's a month-to-month deficit.

As the member knows, in forecasting -- and this agency will be in a position where it will have to do some economic assumptions and future forecasting, which is only an exact science in hindsight -- it will simply have to use prudent assumptions based on all the best economic models it has, and live within its means.

I. Chong: Before I move off the topic of borrowing and investing, I want to be clear. As was stated at the very beginning, when this bill was introduced, this is an independent legislated agency. I suppose, with independence, the board would expect some ability for it to, I guess, deal with its budget and perhaps create a deficit if it were permitted. The reason I'm asking this particular line of questioning is: because of that independence, are they able to create a deficit?

If not, then essentially, if I can assume that the minister is suggesting that this agency would be required to produce perhaps a balanced budget -- if I can use that phrase . . . . If it did not produce a balanced budget, what would be the consequences?

As we understand, there are a number of organizations that the government is responsible for, and it implies that balanced budgets must be provided. But when those things are not provided, then the government may or may not make an exception to allow a deficit budget to occur, one year to another. I'm just trying to make sure I know the guidelines that are available to this Crown corporation, and given its independence, where the ministry draws the line on whether it's permitted to have a deficit at the end of its fiscal year. Whether it likes it or not, if that does occur, what steps would the ministry take to ensure some sort of control of that possible situation?

Hon. J. Pullinger: Let me deal first with the issue of independence. The agency is independent to the degree that any part of government can be independent, and as the member knows, a Crown is a part of government. So there is independence of the board for the carrying out of its business plan and its day-to-day operations, which is the part that is most important in the marketing business -- to have that flexibility. But outside that context, there are all of the policies and regulations and financial legislation of government that will constrain this corporation. It reports to me via the business plan.

I remain the Minister of Tourism and the spokesperson thereof, etc. There will be daily interaction, I would assume -- or maybe not daily, but regular interaction -- between my deputy, myself, the board and the agency. That relationship will still be there, because I carry all of the rest of the responsibility for Tourism -- policy, land use.

[4:00]

I share the development part of the mandate with the board. They have a policy for development and marketing, so I share that. General overall policy and development and other parts of tourism development, such as marketing this tourism development in this province, rests with me. I retain full responsibility for the marketing, as well. So all of those constraints are there. They're not free agents or free spirits. They must deal through the business plan, through the Ministry of Finance and through the ministry for their financial arrangements. But on a day-to-day basis they will be independent in that context.

I. Chong: The conclusion that I'm gathering from the minister is that there will be some controls because of the ability of the ministry to still deal with development and marketing, and also from her response earlier that the Crown corporation would not really be in a position to accrue debt, which is very important for those who are looking at this new act.

The other area I want to canvass, before I turn this over to other members who may wish to speak on it, is

section 6(d). You've got: "For the purposes of this Act, the corporation may . . . establish advisory committees." I was wondering whether the minister is able to give us an example of what kinds of advisory committees would be established for this particular corporation, what the advisory committees would be empowered to do and what their mandates may be, as well. My thoughts on this would be whether these committees would be looking at ways to generate extra revenues and, if that were the case, whether they would be looking at things such as increased fees for the tourism industry. Those kinds of areas, I think, are of concern to many in the tourism industry.

Hon. J. Pullinger: The enabling clause that allows for advisory committees would be to allow committees that exist now, such as . . . . Rod Harris is telling me that the corporation has a marketing advisory committee that does its work and then reports out to the board. It makes recommendations to the board, which the board then accepts or rejects or modifies. I would encourage this new agency, because the tourism industry is very aware that we're at a crossroads in British Columbia. If we aren't very progressive and very aggressive and very creative, we could lose the wonderful edge that we've had, which has seen such phenomenal success in this industry over the last six or seven years.

I would expect, for instance, that they may well . . . . And I would encourage the board to do something like create an advisory committee on aboriginal tourism development, if that's what's happening in my ministry, so that we would be able to work together. I expect that there would be a first nations person on the board, because that it is a huge untapped source and resource for all of the people in this province. I would like to see that developed, as would this government. So it's just a possibility that this board could establish an advisory committee on first nations tourism development in British Columbia, or they could establish an advisory committee on northern tourism development.

So those are the kinds of things. Of course, I am simply flying in the wind in this -- it's all hypothetical -- but there is

[ Page 3741 ]

one right now for marketing that goes to the board. There are a number of those, plus management issues, such as committees to make recommendations around names for replacement seats on the board -- sort of functional things like that.

Hon. D. Streifel: Hon. Chair, I request leave to make an introduction.

Leave granted.

Hon. D. Streifel: Touring the precincts today and present in the gallery is a body of students from the world-famous community of Stave Falls in my constituency. Stave Falls is around Dewdney Trunk Road on the top of the dam. There's a tremendous amount of history. I met and spoke with the students a few moments ago, and they're full of bright questions. I much appreciated the opportunity to speak with them. While I'm on my feet, I'll recognize the other famous aspect of Stave Falls: the Stave Falls Scottish Dancers. I really thank Mr. Robert Lewis for bringing his class over to have a chat with me today, and I bid the House make the students welcome.

I. Chong: The last question I'm going to ask on this

section . . . . I anticipated that my other question would be my last, but the answer from the minister prompted another one, which basically leads to the next section,

section 6(e). It says: "incorporate subsidiary corporations . . . . " I was wondering, in this particular case, about

section 6(

d) allowing the establishment of those committees without apparent restraint, other than the fact that the board must make those kinds of recommendations as to what sub-committees it thinks is necessary for the proper operation of the corporation. But

section 6(

e) requires the approval of the Lieutenant-Governor-in-Council. I'm wondering what would be anticipated in those kinds of subsidiary corporations that would require the Lieutenant-Governor to in fact provide the prior approval.

Hon. J. Pullinger: Nothing is anticipated. That's a standard clause, but in order to do something of that nature, it would require prior approval.

R. Thorpe: I don't want to beat this thing to death, but you did explain that you envisage that borrowing could be up to two or three months and that it would have to be paid back. So that does beg the question . . . . Obviously it will go, without too much of a concrete position from your government, that there should have been a ceiling. But we got over that. I just want to know: how are the funds going to flow? Are they going to flow on a monthly basis from government into this organization?

Hon. J. Pullinger: On a monthly basis according to a formula.

R. Thorpe: I guess we'll get into that in a little bit more detail later. One last question that I have on this section: is that funding flow automatic, or does it only start after the business plan has been approved? In other words, is the flow of funding on an ongoing basis, and is the business plan on another cycle, and do they dovetail? One's not contingent upon the other.

Hon. J. Pullinger: The funding will flow monthly. It's not contingent. There are rules around the business plan, which we can deal with at that section, but the funding will flow monthly throughout the year.

P. Reitsma: On sections 6(

e) and 6(f), I have two questions.

Section 6(

e) says: "incorporate subsidiary corporations, with the prior approval of the Lieutenant Governor in Council." I wonder if the minister could explain that in relation to . . . . Would those subsidiary corporations be able to borrow, spend and acquire, and what are the financial consequences of those subsidiary corporations?

Hon. J. Pullinger: I don't expect that

section of the act will be used. It's a standard provision in Crown corporation legislation that may be used in others, but I don't anticipate it would be used in this one. If, in the hypothetical situation, it were to occur that the corporation wanted a subsidiary corporation, then all that kind of detail would have to be laid out in advance in the business plan.

P. Reitsma: It's somewhat of a puzzlement. If the minister doesn't expect this to be used, then why do we expect it to be put in? Although I'm not being suspicious, I just wonder what reason there is or might be for that particular subsection being put in.

section 6(f), just one question: do other things that the Lieutenant-Governor-in-Council may authorize relate to . . . ? Would that give an opportunity for the increase or decrease of guidelines?

Hon. J. Pullinger: Increase.

P. Reitsma: The guidelines set out in the act for that particular organization can be through the ministry. Can the ministry direct or advise, through the Lieutenant-Governor, that certain guidelines may be increased or decreased?

Hon. J. Pullinger: If I can just clarify, is the member specifically alluding to the incorporation of a subsidiary corporation, or guidelines generally? Generally.

The interaction with government occurs in many ways. One is: in the legislation, we set out the parameters. The business plan must be approved, so if the corporation were to be going off the rails there -- and I don't expect it will -- it would be dealt with there. There are guidelines, rules, around the Financial Administration Act, with which it must comply, etc.

By and large, I would expect that the normal processes of government will prevail. As for direct guidelines for the corporation, they will make their own through resolution of the board.

P. Reitsma: Through this

section 6(f), would the Lieutenant-Governor be authorized to change the powers of this particular corporation or subsidiary corporations? Also, in view of the numbers, could this particular

section make a change in the numbers in terms of the directors?

Hon. J. Pullinger: Those things that are legislated must be changed in this Legislature.

Section 6 approved.

section 7.

[ Page 3742 ]

R. Thorpe: I think I just have one question here.

Section 7(b) -- do I read this correctly? Obviously, a member of government -- since we tried to move an amendment for a member of the opposition . . . . Does this contemplate an MLA from the government side sitting on this board?

Hon. J. Pullinger: The

section allows for any member of the Legislative Assembly, but I don't contemplate a member sitting on the board at this time.

R. Thorpe: Just a point of clarification. You don't contemplate any MLA sitting on this board at this point in time. Is that correct?

Hon. J. Pullinger: That's right.

I. Chong: Just a few questions on this

section -- unless the responses provoke more.

First of all, the remuneration is to be set by the Lieutenant-Governor, which is perhaps normal. My question to the minister is: could she share with us what kind of basis that may be on? This being a new Crown corporation, I'm not sure how the salary or remuneration set by the Lieutenant-Governor will be determined. There must be some kind of standards, whether industry standards or government standards, that will be used. Perhaps she could share that information with us.

Hon. J. Pullinger: Travel, incidental expenses and remuneration rates must be consistent with Treasury Board directive 2/91, which is the policy on compensation for appointees to government agencies, boards and commissions.

I. Chong: Just one confirmation, then: that industry standards do not play a role in this particular section.

Hon. J. Pullinger: It is government standards that will set the remuneration.

Section 7 approved.

section 8.

R. Thorpe: Just on the appointment of officers and employees: "On the recommendation of the board, the Lieutenant Governor in Council may" -- that's what it says, I believe -- "appoint a person as a chief executive officer . . . . " Who else can appoint the chief executive officer?

[4:15]

Hon. J. Pullinger: No one.

I. Chong: On

section 8, I know there have been some changes in one of the other bills that were introduced earlier this session. I'm just wanting clarification on whether the employees that are contained throughout

section 8 will be included in the government's FTE count or whether these are going to be treated separately. I know there's been some confusion over whether Crown corporation employees are counted or not.

Hon. J. Pullinger: They're not counted as part of the ministry.

I. Chong: So my understanding is that they previously were included because it was considered part of the ministry. Now that they're in a Crown corporation, they will not be included in that FTE count, if we were to compare one year to another. I guess that's my best explanation.

Hon. J. Pullinger: That's correct. Those positions that are presently in my ministry will move over to the corporation.

I. Chong: Very quickly, the other question I have on this

section is . . . . I'm not sure where I had read it or come across it. Perhaps it was stated at some point; maybe the minister said it in her opening remarks. The expected staff that would be required for this particular corporation would be 61 people, which I understand is a 20 percent reduction over the previous year. I'm just wondering where those kinds of staff reductions are going to be occurring, if this is being moved directly from the branch of the ministry to the Crown corporation. I applaud the efficiency savings that may be occurring, but I'm just curious as to where in particular that 20 percent reduction is occurring.

Hon. J. Pullinger: That reduction was part of our government's downsizing last fall. It took full effect January 1 of this year. It's done.

I. Chong: With the new Crown corporation, if the ministry had anticipated they were able to carry on -- if they were carrying on -- with 20 percent less staff, it's not anticipated that we're going to see an increase in hiring through the Crown corporation. Perhaps their views are different, and they anticipate that they do in fact need those extra staff.

Hon. J. Pullinger: I expect -- in fact, I know -- that the board will be far more concerned with marketing and development issues, and will do so with the right number of people, not excess.

I. Chong: That was my last question. I just want to conclude by saying that it's good to hear that from the minister -- on this section, anyway -- because there are concerns that perhaps this was just going to become another bureaucratic nightmare.

Whenever Crown corporations are established, people are a bit nervous, and rightfully so, perhaps because they're not sure what's happening. Staff is hired, and then very quickly the revenues funding that particular organization are consumed by staff requirements -- as opposed to marketing, which is very much what we're concerned about here. So I thank the minister for her comment.

R. Thorpe: I wonder if the minister, in her own words, could explain

section 8(4).

Hon. J. Pullinger: Within the context of government policy previously alluded to, the board may recommend remuneration for its CEO to be implemented by the L-G-in-C.

R. Thorpe: Could the minister explain to me, because I don't know, what level of government service the chief executive officer is, compared to government service?

Hon. J. Pullinger: Stay tuned. That hasn't been decided yet, because the recommendation hasn't been made. I would expect that it would be roughly an ADM level.

Section 8 approved.

[ Page 3743 ]

section 9.

R. Thorpe: Financial management. Who will audit this Crown corporation, and how often will that audit take place?

Hon. J. Pullinger: Again, this is a decision that has not yet been made. We're just laying out the bare bones here, and, of course, all those decisions and details will be forthcoming as the corporate board takes over. I would anticipate, however, that the auditing body may well be the auditor general, but that decision is not yet made.

R. Thorpe: Obviously we both have to work at learning this particular bill, because I see that audit is covered by

section 10. As we work with this, we'll both become more conversant with it, so that's good. At least we seem to have a common starting point.

I'm just wondering about the interim reports -- the financial management. Will there be just one report made available on a yearly basis? Or like other independent operating organizations, will there be quarterly or semi-annual reports?

Hon. J. Pullinger: Again, those details are to be determined. There will be one audit, so for sure one report. The board may well choose to issue other reports. Again, I think that would be a decision the board would have to make very carefully, based on the balance between accountability and transparency on the one hand, and the use of -- as the member is very well aware and appreciates -- limited staff time and limited dollars.

R. Thorpe: For what it's worth -- and I won't bring an amendment through on this -- I think it would be a good practice. I don't believe that the minister ever suggested for a second that we would compromise financial administration because of tight budgets. I don't take that at all, but I would just like to put on the record -- and I hope the minister would endorse this as it unfolds into the future with this independent organization -- that at least semi-annual statements or progress reports should be developed and that the public is made aware.

Hon. J. Pullinger: I would concur. I just want to clarify that we're talking about two levels. One is the very detailed audited level, and the other is the regular reporting, which I expect will meet all of the standard practices. I concur with the sentiments the member is expressing.

I. Chong: I have a number of questions on

section 9, "Financial administration." Perhaps the minister can enlighten myself and other members on this side of the House. Where it says, "The board must establish and maintain an accounting system satisfactory to the Minister of Finance and Corporate Relations," would you be able to share with us what kind of satisfactory accounting system is permitted? Is that an accounting system that is currently used by all Crown corporations, or will this one permit particular differences or exemptions? I'm trying to determine whether or not this Crown corporation will follow through as other Crown corporations have.

Hon. J. Pullinger: This simply refers to the fact that the board is required to function according to the standard public accounting systems and, as I believe the member knows a lot more than me, the generally agreed principles of accounting for public and private GAAP.

I. Chong: I wasn't particularly looking for accounting principles as much as I was wanting to know whether the accounting system . . . . The wording here is: "An accounting system satisfactory to the Minister." I didn't know whether an accounting system satisfactory to the Minister of Finance would be the same as an accounting system that would generally be accepted for those of us in the private sector -- or who used to be in the private sector -- and also whether or not the accounting system that would be acceptable . . . . Is one for Crowns different than perhaps the ministry itself?

Hon. J. Pullinger: I'm advised that the system under construction is one that will not only meet the public accounts requirements but will be, in Mr. Harris' words, more robust than that -- in other words, meet higher standards.

R. Thorpe: It's always nice to hear that people have visions of robust accounting systems, especially in an organization that we've heard is designed for and is supposed to be focusing on robust marketing programs. I just want to make sure that I didn't misunderstand and that we're off developing an accounting system where . . . . As I'm sure the minister is aware, government is spending millions of dollars developing a corporate accounting system, and I would hope that we're making sure these things all dovetail together so that in fact we do have the efficiencies and that we do have more moneys for the marketing programs.

Hon. J. Pullinger: The member is correct. That kind of work to streamline systems has been going on across government for some time. I would fully expect that this would mesh with that.

I. Chong: Sometimes we're bouncing like a yo-yo when we're going through this committee stage.

I'll move to

section 9(2), where it says: "Whenever required by the minister, the board must render detailed accounts of its revenues and expenditures for the period or to the date the minister designates." I was wondering whether the minister can advise whether that request to the board is only available to the minister or whether others are able to make a request for information, as well, without having to go through freedom of information.

If a number of stakeholders were curious and wanted some information or if members of the opposition were wanting some information -- which should clearly be available, being that this was formally a part of the ministry -- would there be others who would be permitted to have a detailed account of the revenues expenditures . . . ?

Hon. J. Pullinger: The existing processes for garnering information would apply to this corporation.

I. Chong: I just want to quickly review this other subsection before I pose a question I may not need to.

Section 9(4) says: "The Minister of Finance . . . may direct the Comptroller General to examine and report to Treasury Board on any or all of the financial and accounting operations of the corporation." I know that sounds rather standard, but I'm just wondering whether the minister can advise us . . . . When the comptroller general is directed to examine and report to Treasury Board, would it normally be reporting of a specific project or would it in fact be reporting on the operations to date and therefore present an interim financial report? Is that what is normally required when Treasury Board requires a report?

[ Page 3744 ]

Hon. J. Pullinger: This is an enabling clause that requires the bodies responsible -- i.e., Treasury Board, the Minister of Finance and ultimately cabinet -- to require any or all reports as deemed necessary.

J. van Dongen: To follow up on

section 9(4), the possibility of having the Minister of Finance involve the comptroller general and report to Treasury Board on certain aspects of accounting and finance -- is that a standard provision? Is that what we call a boilerplate provision?

Hon. J. Pullinger: To the best of my knowledge, yes, it is.

[4:30]

J. van Dongen: I'm wondering: under what circumstances would that authority be exercised? I'm thinking in terms of the accountability of the board of directors -- to the minister, ultimately -- for the operations of the Crown corporation. It seems that this kind of decision or request by the Minister of Finance to the comptroller general is sort of an intervention of that. I would think that the duties of the board of directors are to report on an annual basis -- or more often, as required -- to the minister. I'm wondering: under what circumstances would a Minister of Finance make this request?

Hon. J. Pullinger: The kinds of things -- and again this is hypothetical . . . . The Minister of Finance may well want a report on travel expenses or administration or a specific project. I am sure that any such request would be for a good reason.

J. van Dongen: With respect to 9(1), establishment and maintenance of "an accounting system satisfactory to the Minister of Finance," is there again a standard requirement in terms of a monthly recording of revenues and expenditures, and time frames in terms of when those records have to be completed on a monthly basis?

Hon. J. Pullinger: The reporting systems, as I understand it, vary somewhat between different Crowns, but the intent of this one is certainly to have some means of a monthly reporting system.

J. van Dongen: Would those monthly reports go, as a matter of standard practice, to Treasury Board or to the Ministry of Finance, or would they normally go to the board of directors within a Crown corporation? Particularly, what is anticipated in this case?

Hon. J. Pullinger: That is to be determined, but I would anticipate, as a minister, requesting that kind of report from the board.

J. van Dongen: Did I understand correctly that the minister said she would be expecting monthly reports from the board of directors in terms of the operations, particularly finance and accounting?

Hon. J. Pullinger: I would anticipate that kind of interaction.

Let me just address the broader question for a moment. This arm of government -- which is what it is -- is essentially a partnership with the private sector. In order for it to be effective, it must work very closely with the rest of my ministry. I think that's understood. Certainly one way to do that would be to have a lot of communication on the day-to-day or month-to-month finances. Those details will definitely be worked out as we move along here.

J. van Dongen: Again, the source of my question is to try and pin down the accountability, particularly of the board of directors, for the total operations: the finance, the accounting for the records and the management's review of operations on a performance basis. When you have a chain which, I understand, fundamentally involves the minister, the board of directors, the CEO and then the staff -- and the risk is fairly great within a government setting -- I always worry about interventions of some sort that hopefully have been duly authorized, and I'm sure they are in this case . . . .

For example, if this act passes, then the Minister of Finance could ask for this or that. But we also have the involvement of the Crown corporations secretariat, and I always worry that there's some blurring of responsibilities. Ultimately the responsibility for the total operations, in my view, is the board of directors to the minister.

I'm wondering if the minister could comment on that in terms of how she sees that operating. Too often the board of directors, particularly of Crown corporations -- and we've seen some examples of it -- either don't fully understand that very specific channel of accountability or don't always carry it out.

Sometimes they are given a false sense of security by virtue of having these other bodies, such as the comptroller general, Treasury Board, the Minister of Finance or the Crown corporation secretariat, sort of floating around and giving them the perception that maybe they don't have the full responsibility for this organization. I'm wondering if the minister could just comment on that a little bit in terms of how she would expect the board of directors of this Crown corporation to be accountable to her.

Hon. J. Pullinger: I expect that the board of directors, and specifically the chair, would work very closely with me. I would expect that they would carry out the day-to-day functions of the annual business plan, which has been approved jointly by me and the board. I would also expect, however, that the board and the operation be fully accountable through all of the means to do that, including the Crown corporations secretariat, the Minister of Finance, the auditors, etc. I would expect that they would meet the highest standards of accountability in that regard, and I'm sure that the board is also expecting to do that.

J. van Dongen: What would the role of the Crown corporations secretariat be, specifically, with respect to this board?

Hon. J. Pullinger: First of all, I'm not very familiar with the details of what that body does. I am informed that the Crown will file its annual report with the Crown corporations secretariat, and the Crown appoints an analyst, who works closely with the Crown.

The secretariat, in broad principle, was put in place to make the Crowns function better and to their maximum and together, with some coordination as well as accountability.

J. van Dongen: I'm not sure this is totally relevant to this section, but I think it is. Could the minister comment on whether or not there is any liability, or responsibility in some other way, on the part of the directors for the financial reporting and accounting of the organization? I realize this could be part of a broader question about director liability, but I wonder if the minister could just tell us . . . . I know that in public

[ Page 3745 ]

companies now, there are certain types of issues or problems that directors can be sued for and can be liable for. I'm wondering if there's anything like that in this corporation.

Hon. J. Pullinger: I'm advised that a Crown corporation is not like a publicly traded corporation. The directors are not personally liable.

I. Chong: I was just going to follow up on that question asked by the hon. member for Abbotsford. I understand that this Crown corporation is not like other public or private corporations. But being that it is a board, we should be concerned about directors' liability, as non-profit organizations are also concerned about directors' liability.

What I'd like to know -- if the minister is able to share with us -- is to what extent directors' liability is or is not there for the particular board of directors here. There must be some measures or guidelines so that the board of directors do not feel that they are empowered to do what they will, without any form of responsibility or liability.

Hon. J. Pullinger: I am in the process of inviting legal counsel into the chamber to assist with that. But I note that under

section 16 and 17, I believe -- in any case, later in the act -- that's dealt with more specifically. I would recommend to the member that if you have no further questions other than that one, we pass that question and move on. Staff will be here to deal with that question.

I. Chong: I did see

section 17; I did read of the director liable to account. But it more or less referred to a director liable to account for personal involvement and where they stand to profit, versus directors' liability in other areas of the directors' powers.

As I said, in non-profit organizations, on various committees where people who represent the community serve, there is always concern. That's one of the reasons why community members are reluctant to become directors of organizations, recognizing that there are issues of liability to deal with. I just want to be clear on what that may be in this particular Crown, if it's set differently than private organizations.

Hon. J. Pullinger: First let me introduce Dennis Carson, legal counsel with the Ministry of Attorney General, who has worked with us in developing this legislation. He knows everything that I don't, which is considerable when it comes to the minute details of this.

I want to correct the record apropos of my last comment. The Company Act does apply to this board; in error, I indicated something different. I just want to clarify that my most recent advice is that in fact the Company Act does apply -- all the normal accountability.

I would propose, however, that we move from financial administration to the liability section,

section 17, and deal with those specific issues there. I think that would be more appropriate, if the member is willing.

I. Chong: I am comfortable that if we were to move to that, we would address those issues of directors' liability. In that section, it does not allude to the kind of content that we might want to address. If the minister is giving me that assurance -- and I see she is nodding that we can deal with it -- that's fine.

I do have one more question on this section, and the hon. member for Abbotsford may also have a question. In

section 9(6), the Minister of Finance and Corporate Relations is the fiscal agent of the corporation. By fiscal agent, do you mean for the purposes of borrowing or for the purposes of investing? What other role do you envision for the fiscal agent that the Minister of Finance would be involved with in this Crown corporation? Could the minister advise and share with us some of those details?

Hon. J. Pullinger: To ensure that I don't mess up the answer, I'm going to read it:

"The role of the Minister of Finance and Corporate Relations as fiscal agent includes: (1) carrying out negotiations with investment bankers and coordinating communications between investment bankers and the corporation; (2) monitoring financing requirements, reviewing and approving financing and financial hedging transactions and providing loans and debt management products to the corporation; (3) periodic review and approval of banking arrangements; (4) providing prudent and efficient investment management and banking arrangements of surplus cash balances and sinking funds, and advice on investment strategy."

I. Chong: I do appreciate the minister giving us that information so that it's recorded in Hansard, as we did not have those details before us.

The one comment I want to make on the last role or condition that the Minister of Finance has as a fiscal agent is about the investing of surplus cash, as she mentioned. Is that in fact a decision that the Minister of Finance can make on his or her own, or would the board have to direct the Minister of Finance to make that investment? In other words, if there was surplus cash in the Crown corporation, would the directive have to come from the board of directors first to the Minister of Finance, versus the Minister of Finance coming along and saying: "We would like to make this investment"?

[4:45]

Hon. J. Pullinger: I would expect that the initiative would come from the board, in most instances. I would expect that the board will be very good at managing those sorts of issues. But in actual fact, the legislation provides for the board and the Minister of Finance to work together on those kinds of issues.

Section 9 approved.

section 10.

I. Chong: One quick comment. I know a question was posed earlier by the hon. member for Okanagan-Penticton regarding the audit. I want to be very clear on this. I know it's in its transition stage. I know we're not clear yet on whether the audit will be performed by an external third party or by a government auditor, such as the comptroller general or the auditor general. It is very important that we get that information as quickly as possible, because it may provide us with a series of other questions.

If the appointed auditor is an internal auditor versus a third-party audit, then I would like to know . . . . It says the cost of the audit must be paid by the corporation. If an internal audit were used, what kinds of costs would we be looking at? Would there in fact be a charge, say, from the comptroller general's office to the corporation? I want to be very clear that while this was a part of the ministry, those costs were not assumed by the ministry itself, and why there would be a change, if in fact there is such a change.

Hon. J. Pullinger: All the costs will be borne by the corporation. As I mentioned earlier, an auditor has not yet been selected. Stay tuned.

[ Page 3746 ]

I. Chong: The other part of the question I had for the minister, which perhaps didn't get recognized in my

preamble, was . . . . When this Tourism B.C. agency was part of the ministry, perhaps there was no audit done. If that's the case, I stand corrected. If there was some sort of audit done in the past, were those costs borne by and taken out of the funding revenues that were available for marketing? Or were those costs a part of the ministry itself? Why would we make that kind of change, given that there is a substantial funding cut now that this corporation is set up?

Hon. J. Pullinger: I hope I've got it straight this time. Currently, even if the auditor general is appointed -- which is at the will of the auditor general, as the member knows -- there is a charge for that. Otherwise, today all the normal accounting practices and procedures apply, as they will to the new corporation. But the corporation -- I want to be clear -- will bear the costs of its own auditing. Once the corporation is up and running -- and we're providing some startup funds, as the blue book demonstrates -- it will be responsible for all of its own expenses. There will be none accrued back to the ministry.

I. Chong: I appreciate the clarification. Perhaps the minister can then provide one further clarification: in the past, was the Tourism B.C. agency in fact audited? Were those costs paid for out of the Tourism B.C. budget, or were those costs just included as part of the Ministry of Small Business, Tourism and Culture?

Hon. J. Pullinger: Yes, of course it has been audited. All of the normal accounting and auditing procedures of government have applied to that part of my ministry as to any other, and the costs have been borne by the ministry. Does that answer the question? Good.

[T. Stevenson in the chair.]

I. Chong: That does explain it. I guess I'm somewhat concerned that although it's recognized that costs should stay with the corporation, in the past it was a cost of the ministry and did not affect the budget for tourism marketing. It now appears to be a cost being transferred to the new Crown corporation. I'll leave that for a moment, unless the minister wishes to respond to that further.

There is another question I have regarding the audit process. It says "at least once for each fiscal year," which is the normal standard practice -- once for each fiscal year an audit is provided. But can the minister advise as to time lines, given that the first fiscal period will be ending March 31, 1998 -- whether the audit would be provided within six months, eight months or three months of the end of this particular fiscal year?

Hon. J. Pullinger: There are two parts to the question, I believe. The first is that it appears to me that what the member is getting at, in terms of who pays for what, is whether or not there is an erosion of the marketing dollars by the administrative function. Is that correct? We have fully accounted for that in the setting up of the new corporation and the transfer of startup costs. To the best of our ability, we have done that. That's number one.

Number two, the auditing as laid out in

section 10 would take place as is normal business. It takes roughly three months, as a matter of standard practice, for the audit to be done. So I would expect that it would be done within that framework.

J. van Dongen: The question I have probably relates to both

section 10 and

section

Section 10 talks about the requirement for an audit to be done and to be paid for by the corporation. It says it needs to be done once a year, but it's not clear to me, in reading 10 and 12, that it's the audited financial statement that would form part of the annual report. I wonder if the minister could just comment on that.

I'm looking at it from two perspectives. One is a three-month time frame in which the legal obligation should be there to complete the audit of the annual finances. That's the first thing. Secondly, will the audit and the audited financial statements that are being talked about in

section 10 form part of the annual report?

Hon. J. Pullinger: If I understand the member's question correctly, you want to know if the audit is part of the annual report. Is that correct? The intent of the corporation is, in fact, to do that. That's standard practice, to have a sign-off in the annual report saying that this corporation has been audited. And the new corporation will do that.

J. van Dongen: Well, if that's the intention, then I'm wondering why there wouldn't be more of a direct linkage between the audit, which is required under

section 10, and the financial statement, which is spoken of in

section 12(b). Again, I say that on two counts. One is that the financial statements are audited as the minister says is intended. The second is that we have the connection between the requirement to do an audit under

section 10 and the three-month time limit talked about for the annual report.

I would ask the minister to consider an amendment at some point in the future before this bill is passed: that we have the three-month requirement on the audit and, secondly, that the audited financial statements are a part of the financial report.

Hon. J. Pullinger: The legislation is intended to provide the framework, and the level of detail that the member is speaking of -- which I appreciate -- will be provided through the bylaws and policies of the corporation. As I say, it is the intention of the corporation to meet or exceed normal business practices in that regard.

J. van Dongen: I guess I have two options here. I could ask the minister for her personal assurance that it will be the audited financial statement that forms part of the annual report. And I ask her for that.

But secondly, I also ask her to consider an amendment to 12(b), and I guess I'll put that on the record later. But I would like to have both those things, if I could get those from the minister.

Hon. J. Pullinger: I am advised that that's a standard practice with the Crowns.

J. Wilson: I seek the indulgence of the House to make an introduction.

Leave granted.

J. Wilson: Today we have the privilege of having 25 grade 7 students from Parkland Elementary School in my riding of Cariboo North. They are joined by their teacher Mrs. Semens and several parents. Would the House please join with me in making them welcome and wishing them a very enjoyable and informative visit to the capital city.

[ Page 3747 ]

Section 10 approved.

section 11.

I. Chong: There are a number of questions that I believe we have in the business plan area, because a number of questions we posed earlier today and even some from two and a half weeks ago deferred us to this area. There are, as I said, a substantial number of questions, and I'm wondering whether the minister has all the staff she requires at this time for us to proceed. I see her nodding, so that's fine.

To start off with, on the business plan . . . . I think the business plan is a very important part of this piece of legislation because it does provide -- more so for those of us looking from the outside in and not being on a board -- just what kinds of activities may be here. We all recognize, for the development of tourism and marketing and the promotion of tourism . . . . But the business plan will give us that detail.

Part of that business plan, I do believe, has to have evolved from those involved in the tourism industry. Consequently, I would imagine that there should be available a memorandum of understanding, perhaps, as to what kinds of things are to be implemented in a business plan. I am wondering whether the minister is able to provide that to us.

I recognize that the memorandum of understanding we asked for some two and a half weeks ago . . . . We were advised it was a document that was being worked on. And now, some two and a half weeks later, I'm just wondering where we are in that process.

Hon. J. Pullinger: As well as (a), (

b) and (

c) laid out under

section 11, the business plan would include things such as a business review, the objectives of the corporation, strategies that the corporation proposes to use to meet those objectives, and specific actions and programs that would form part of the strategies that meet the objectives. It sounds like the house that Jack built, but those are the kinds of things that I would expect in the business plan in increasing detail.

[5:00]

I. Chong: I appreciate that information from the minister, and I suppose that's part of -- I won't say the problem, but -- the dilemma we face. At this point we're wanting to be able to . . . . I know it seems premature, but I have an idea of what kinds of objectives, as such, are in the business plan to ensure that it does include things so that we -- on this side of the House, at least -- may have some input into that.

We've heard fairly consistently throughout the debate during committee stage that there would be bylaws and policies that the corporation will be preparing and that those will be prepared by the board. The board having not yet been established and having not yet met . . . . Again, we're not sure on those things. At this point it's important that the members on this side of the House have some idea as to those kinds of bylaws and policies that may be in place and perhaps may fit within the guidelines of the business plan.

Easily enough, people who are in business and prepare a business plan certainly have the revenue and expenditure proposals, which is essentially their budget. That's to be expected.

Statement of assets and liabilities: again, it's not so much a problem, especially when you're a new corporation. You list very few liabilities, and assets will be those transferred by the ministry that currently holds some of those within its branch. Within the context of this legislation, it's not providing us that much information, and we on this side of the House, anyway -- and myself in particular -- want to be assured that we have some idea as to the business plan details.

Given that the business plan is to be provided before each fiscal year . . . . I know we're in a catch-22 situation. Before the fiscal year is now, but the board hasn't yet been establish