2003 Legislative Session: 4th Session, 37th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, MAY 8, 2003

Afternoon Sitting

Volume 15, Number 7

CONTENTS

Routine

Proceedings

Page

Introductions by Members

Introduction and First Reading of Bills

Forests Statutes Amendment Act (No. 2), 2003 (Bill 44)

Hon. M. de Jong

Forest (Revitalization) Amendment Act (No. 2), 2003 (Bill 45)

Hon. M. de Jong

Statements (Standing Order 25 b )

B.C. Coalition of Motorcyclists

B. Lekstrom

New tower at Vancouver General Hospital

K. Johnston

Health care services in Burnaby

J. Nuraney

Oral Questions

Privatization of B.C. Hydro assets

J. MacPhail

Hon. R. Neufeld

Aerospace industry proposal for Kelowna

J. Kwan

Hon. R. Thorpe

Management of Coquihalla Highway

K. Krueger

Hon. J. Reid

Reports from Committees

Special Committee on the Citizens' Assembly on Electoral Reform, first report

Petitions

J. Kwan

J. MacPhail

Third Reading of Bills

Community Charter (Bill 14)

Committee of the Whole House

Forest (Revitalization) Amendment Act, 2003 (Bill 29)

J. MacPhail

Hon. M. de Jong

B. Lekstrom

D. MacKay

[ Page 6613 ]

THURSDAY, MAY 8, 2003

The House

met at 2:04 p.m.

Introductions by Members

Weisbeck: It is my pleasure to welcome to British Columbia and to our House

a distinguished researcher in the field of parliamentary and constitutional law.

Joining us in the gallery this afternoon is Ms. Oonagh Gay of the British House

of Commons Library at Westminster. Ms. Gay is in Victoria to meet many of our

statutory officers and to examine their unique roles and the related topics of

accountability and independence of parliament. Would the House please make our

guest welcome.

[1405]

Hon. S.

Santori: This afternoon it gives me great pleasure to introduce two of my

constituents from Trail and Rossland, Mr. Byron Siemens and Brad Dasiuk, both in

the insurance business and former competitors of mine. They were very happy that

I was elected in 2001. I heard their insurance sales went up 40 percent since I

left the area. I would ask at this time that the House to make them feel very

welcome.

Nuraney: It gives me great pleasure today to introduce my biggest supporter

in all aspects of my life, my good wife Gulshan, who has brought with her, her

family visiting from India: her brother Salim, his wife Zakia and their son

Samir, who will be ten years old in two days. Also accompanying her is her

sister Shehnaaz, who lives in North Vancouver. May the House please make them

welcome.

J. Les:

On behalf of the member for Surrey-Tynehead, it's my pleasure to welcome to the

House 30 grade 5 students from Fraser Heights Secondary School in Surrey. They

are accompanied today by their teachers, Mr. Tino D'Alfonso and Ms. Sharon

Shilliday. They are here touring the buildings today, and I would like to invite

the House to please welcome the students from Surrey.

W. Cobb:

Today it gives me great pleasure to introduce a group of very hard-working

municipal leaders from around the province and particularly from the heartlands.

They're here today representing the Council of Resource Communities, and they're

here helping us develop the rural strategy. With us we have Mayor Donna Barnett

from 100 Mile House; Mayor Colin Kinsley from Prince George; Mayor Ross Priest

from Cranbrook; and last but not least, the only Willie Mitchell fan in the

House, Gerry Furney.

Hon. R.

Thorpe: I'd like to introduce two constituents of mine from Peachland,

British Columbia: Dwayne and Dorothy Smith. I'd also like to introduce Jeff

Smith from Victoria. Would the House please make them very welcome.

Introduction and

First Reading of Bills

FORESTS STATUTES

AMENDMENT ACT (No. 2), 2003

Hon. M. de

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

intituled Forests Statutes Amendment Act (No. 2), 2003.

Hon. M.

de Jong: I move that Bill 44 be read a first time now.

Motion

approved.

Hon. M.

de Jong: I am pleased to introduce to the Legislature today Bill 44, the

Forests Statutes Amendment Act (No. 2). The bill amends the Forest Act to

deliver on the government's commitment to the defined forest area management

model. These changes will enable licensees and the B.C. timber sales program to

carry out a coordinated timber supply analysis for their timber supply area.

The Forest

Act is also amended to clarify who can hold a road permit and to harmonize the

language regarding construction and maintenance of forest roads with the Forest

and Range Practices Act.

Lastly, the

bill amends the Forest Act and Range Act to strengthen their compliance and

enforcement regimes and to harmonize them with that which exists in the Forest

and Range Practices Act. These changes will improve the effectiveness of the

ministry's compliance and enforcement program.

I move that

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

of the House after today.

Bill 44

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

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

[1410]

FOREST (REVITALIZATION)

AMENDMENT ACT (No. 2), 2003

Hon. M. de

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

intituled Forest (Revitalization) Amendment Act (No. 2), 2003.

Hon. M.

de Jong: I move that Bill 45 be introduced and read a first time now.

Motion

approved.

Hon. M.

de Jong: Mr. Speaker, Bill 45 continues our work on the forestry

revitalization plan and its important goal of building and revitalizing B.C.'s

most important industry. This bill completes the legislative work required to

introduce a more market-based pricing system. Specifically, the proposed

amendments to the Forest Act introduced through this bill establish a market-

[ Page 6614 ]

based approach to tenure allocation. In effect, any future forest licence,

tree farm licence or timber sale licence will be awarded on the basis of a

competitive bid.

The bill

introduces stronger measures to prevent abuses of the market system. For

example, it will increase penalties for collusion in timber auctions or for

restricting competition in the sale or purchase of logs. It will also establish

penalties for submitting inaccurate appraisal data.

This bill

will also introduce a new type of tenured licence: the community salvage

licence. This licence will deliver opportunities for communities interested in

salvage logging — opportunities communities have told us they want.

In

summary,

this bill delivers on commitments made by this House to ensure a more

market-based system. It delivers on our commitments to open up opportunities for

more operators in our forest sector. It will allow our forest sector to do what

it does best: get the best use out of the public resource and create good jobs

and strong communities.

I move that

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

sitting after today.

Bill 45

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

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

Statements

(Standing Order 25

b) B.C. COALITION OF MOTORCYCLISTS

Lekstrom: Today I rise to speak on an issue. Today was the annual MLA ride,

sponsored by BCCOM. The British Columbia Coalition of Motorcyclists is a

professional lobbying organization that works on behalf of all motorcyclists'

rights in the province of British Columbia. BCCOM was founded in 1985 by

concerned riders who felt that they were facing discrimination based solely upon

their mode of transportation.

Since its

inception BCCOM has evolved into much more, becoming instrumental in the

promotion of motorcycle safety, education and awareness in British Columbia. The

coalition has increased the profile of the motorcycling community in both the

provincial and municipal levels of government. As well, BCCOM endorses,

recognizes and supports all aspects of motorcycling from street and touring all

the way to racing and off-road riding.

BCCOM is a

membership-driven organization that relies solely on membership dues to maintain

a strong voice for the motorcycling community. BCCOM has lobbied and been

instrumental in a number of issues. They have lobbied to have motorcyclists

included in the high-occupancy-vehicle lanes which are in use. They have also

successfully worked with municipalities to have designated motorcycle parking in

various areas of the municipalities. They've also achieved the creation and

implementation of collector plates for motorcycles in British Columbia. They've

helped establish and maintain off-road riding areas. As well, they are also

responsible for having May proclaimed…. The minister today proclaimed May as

Motorcycle Awareness Month.

Presently

BCCOM is working on a number of initiatives, which I have the privilege to work

with them on. As a motorcyclist yourself, Mr. Speaker, I know you understand the

importance of making sure that British Columbians are aware of the safety

aspect, particularly when it comes to motorcyclists.

BCCOM is

presently working with ICBC on the issue of transferable plates for

motorcyclists who may own more than one motorcycle. Many own two or three, from

vintage to brand-new. The ability to work with transferable plates has been a

very important issue for BCCOM. I'm proud to say that they've met with ICBC, and

ICBC is working with them today.

In closing,

I would like to thank BCCOM for the work that they do on behalf of

motorcyclists. Thank you again, Mr. Speaker.

[1415]

Mr.

Speaker: Thank you. It is indeed nice to feel the wind in your hair.

[Laughter.]

NEW TOWER AT

VANCOUVER GENERAL HOSPITAL

Johnston: Today is a great day for health care in Vancouver and British

Columbia. Today the Premier officially opened the in-patient tower in the Jim

Pattison Pavilion at the Vancouver General Hospital. On hand at the opening were

Keith Purchase, board chair of the Vancouver coastal health authority, and Jim

Pattison, in whose honour the facility is named.

Fifteen

years after construction began, the 19-storey tower at Vancouver General

Hospital is now open and will provide 459 new beds and modernized equipment and

care facilities for patients. The patient rooms in the tower will be bright, and

each one will have its own washroom with shower. Each is equipped with an

overhead patient lift.

The

designers ensured that the building was flexible and would allow for expansion

of network services and increased power requirements in the future. The

provincial government announced funding in 1999 to complete the tower as part of

a $156.4 million VGH redevelopment project. At the same time, philanthropist and

entrepreneur Jim Pattison donated a gift of $20 million over seven years to

establish a centre for excellence in prostate research.

The

completion of this project is a prime example of how government, the health care

community, private partners and the province can come together and focus on

patient care. The consolidation of services into this facility will enable the

health care system to deliver patient services more effectively. This is a

tremendous day for patient care in the province and for the residents of my area

of Vancouver-Fraserview.

The tower

will mark a new phase of health care delivery and ensure greater access to

services for thousands of people who rely on Vancouver General Hospi-

[ Page 6615 ]

tal. All of us in this province owe a debt of gratitude to those who

contributed towards this project, including 10,000 staff, 500 volunteers and the

charitable foundations of VGH and UBC.

I'd like to

thank them for their efforts in putting patients first.

HEALTH CARE SERVICES IN BURNABY

Nuraney: As my colleague across the floor says sometimes: "Some more

good news in the health care system." We occasionally hear from the

naysayers who tell us that our health care system has lost ground since this

government was elected. A few weeks ago the Minister of Health Services gave

British Columbians a progress report on the picture of health in our province. I

would like to weigh in with observations of my own from the community of

Burnaby.

I continue

to see firsthand a more positive and promising outlook that gives me reason to

be confident in the direction our government and the Fraser health authority are

heading. On April 25 my colleagues and I attended the opening of a new kind of

highly specialized tertiary hospice palliative care unit in the Burnaby

Hospital. This unit is the first of its kind in the Fraser health region. It

will become the regional centre for patients facing life-limiting illnesses and

difficult-to-manage symptoms in Burnaby, New Westminster, the Tri-Cities and

beyond.

Just last

week I met with the Burnaby Hospital staff, who informed me that the

decommissioning of the beds at the old Cascade Residence in the hospital is

complete. All patients have been successfully transferred to the new care homes,

with little disruption to their lives. Next, after some renovations, Burnaby

mental health services will be moving into the Cascade building at the Burnaby

Hospital.

Are all our

health care issues in our area dealt with? Certainly not. We have a long way to

go, but I think in the past year our health authority has made some great

strides in making sure the people of Burnaby have access to a health care system

that directly meets their needs. We are moving in the right direction.

[1420]

Mr.

Speaker: That concludes members' statements.

Oral Questions

PRIVATIZATION OF B.C. HYDRO ASSETS

MacPhail: Last fall when we asked the Minister of Energy why he was planning

to break B.C. Hydro in two, he didn't say it was because the government was

desperate to get debt off-book. He didn't say that it was because the government

wanted to make things easier for its corporate campaign backers. He said that if

we want to continue to trade in the Pacific Northwest, we have to have

transmission separate from generation.

He went on

to say — and he said this as recently as this week again — that that was a

condition imposed by the Federal Energy Regulatory Commission in the United

States — FERC for short. Well, let me read from a White Paper from the U.S.

commission — that very same commission, FERC. It's available on their website.

It was published just a few days ago. Let me read what it says: "We will

eliminate the proposed requirement that public utilities create or join an

independent transmission provider." Now that he can't blame FERC, perhaps

the minister can tell us the real reason why he's breaking up B.C. Hydro.

Hon. R.

Neufeld: Again, I'll explain it to the member, as I have done quite a few

times. We are moving towards the future in British Columbia. We are implementing

our energy policy. What we want to do is have clear, transparent rules,

regulations and tariffs for our independent power producers that want to

generate electricity in the province and actually access a transmission system

without having to go to a generator to be able to do that. That is good news for

British Columbia and moves us forward.

Secondly, I

have always said that it is not a requirement of FERC that we be separate, but

it will be in time, and we want to be ahead of the curve on this totally so that

we are able to access transmission in the Pacific Northwest so we can sell

electricity in the United States and continue that benefit of $150 million a

year, which keeps our hydro rates low for British Columbians well into the

future.

Mr.

Speaker: Leader of the Opposition has a supplementary question.

MacPhail: Well, the minister is actually behind the curve. Perhaps he hasn't

seen the document. You're right: it's only a week old. It says here: "We

will eliminate the proposed requirement that public utilities create or join an

independent transmission provider." They did that last week. Get up to

speed, Mr. Minister. At a time when the public utilities across the western

states are successfully making their concerns about FERC plans known, when FERC

itself is responding to those concerns by changing its requirement so that

public utilities don't have to sell off or create independent transmission

providers, this minister and this government are blindly rushing ahead with a

plan that will break up B.C. Hydro.

British

Columbians don't like it. The minister's hiding behind FERC. Will the minister

admit today that he's wrong and that FERC doesn't require the breakup of B.C.

Hydro, and will he pull the transmission company legislation from the order

paper? Or has he not seen the latest information from FERC?

Hon. R.

Neufeld: Interesting. We have never said we're going to join an RTO or

another independent system operator in the Pacific Northwest. B.C. Hydro has had

discussions with the Pacific Northwest RTO since, I believe, 1997 or 1996 under

a different administration. I don't know. I remember seeing a letter written by

a previous Minister of Energy and Mines, Mr.

[ Page 6616 ]

Dan Miller, who said, in fact, in his letter that the previous government,

which this member was a part of, would be willing to give up control of part of

B.C. Hydro.

We have

said we're not going to give up control of part of B.C. Hydro in any way, shape

or form. What we've said is that we continue to have B.C. Hydro and all its

assets, including the transmission assets, within public ownership. We committed

to that in the energy policy, and we've done that. We continue with that, and we

will move forward with keeping it as a public entity for the people of British

Columbia.

Mr.

Speaker: Leader of the Opposition has a further supplementary.

[1425]

MacPhail: I once heard a radio commentator accuse this minister of not

understanding his file. Well, he just demonstrated that.

The joining

of an RTO in any way, even if it is necessary, doesn't require an independent

transmission provider. That's what FERC is saying now. That's why Manitoba Hydro

doesn't have to break it up. That's why British Columbians don't want B.C. Hydro

broken up into little bits that can be sold off.

The

minister was hiding behind FERC's requirement earlier this week. We have the

radio. He said FERC, the Americans, are demanding this independent transmission

provider. He's wrong. The western Governors are expressing concerns about FERC.

They've been doing the best to represent the interests of their constituents —

the ratepayers in their states — against an arbitrary decision process

designed in Washington, D.C. Meanwhile, here in British Columbia we have a

government and a minister who are rushing ahead to do the bidding of an American

regulatory body that has no jurisdiction whatsoever. FERC has….

Interjections.

Mr.

Speaker: Order, please. Order, please. Would the member please now put her

question.

MacPhail: So now that FERC has said that it doesn't have to have an

independent transmission provider, can the minister explain to us why he's

hoping to sneak this legislation through before May 30, when FERC has changed

the rules and says B.C. Hydro can remain whole? Whose benefit is at risk here?

His campaign backers? The government's plan to get debt off-book? His excuse for

breaking up B.C. Hydro is gone now.

Hon. R.

Neufeld: Well, again, the only member in the House that's trying to raise

some concerns is the member across the way, who is trying to say that we're

privatizing or selling any part of B.C. Hydro. That is blatantly untrue — we

have said consistently, consistently, consistently. It's her and her backers

that don't understand a whole bunch of things and want to create fear out there.

B.C. Hydro,

in its whole identity, will remain in public hands. The people of the province

will continue to own the dams, the transmission and the generation for future

generations to come. What the member should do is actually look at what happened

in Manitoba. They have functionally separated transmission, distribution and

generation. Quebec hydro has done the same. We're doing the same thing. The

transmission lines and towers continue to be owned by B.C. Hydro. The business

on the lines will be run by BCTC.

AEROSPACE INDUSTRY PROPOSAL

FOR KELOWNA

J. Kwan:

Residents in Kelowna are very concerned that the provincial government may

be passing up an important economic opportunity. As the minister should know,

the proposal would see Viking Air establish an operation vacated by Western Star

Trucks, generating millions of dollars in economic activity. Can the Minister of

Competition, Science and Enterprise tell this House why he's passing on a

partnership that would see up to a thousand jobs — new aerospace jobs — in

Kelowna?

Hon. R.

Thorpe: Our government is committed to ensuring that the aerospace industry

in British Columbia has the skilled workers it needs throughout the entire

province of British Columbia. I am working in cooperation with the Minister of

Advanced Education, and very shortly the minister will be announcing an

initiative to ensure that not only do we have skilled workers today for all of

the aerospace industry in British Columbia, but in the future we will have all

the skilled workers we need to ensure that British Columbia continues to attract

and create jobs, attract investment and grow our economy.

Mr.

Speaker: The member for Vancouver–Mount Pleasant has a supplementary

question.

[1430]

J. Kwan:

The minister's dithering on this file. The deadline is days away. He had

loads of time to actually get up to speed and move on this. Residents of Kelowna

are on board with the plan; the Okanagan University College is on board; the

mayor is on board. The federal government is very interested in supporting the

proposal, but they need the province to contribute training to make that

proposal work.

The

Okanagan University College is a natural home for aerospace training. BCIT's

aerospace training has a huge wait-list. Why is the Minister of Competition

willing to sacrifice thousands of jobs and economic opportunity in the Okanagan

just because his government has delayed, slowed, and is refusing to make an

investment in education?

Commit

today — now, in this House — that he will provide for the training dollars

right now.

[ Page 6617 ]

Hon. R.

Thorpe: It's a little galling to have those two members over there talk

about the economy and building an investment climate in British Columbia and

creating jobs in British Columbia when you two over there single-handedly

destroyed the economy of British Columbia. But, Mr. Speaker….

Interjections.

Mr.

Speaker: Order, please. Order, please.

Interjections.

Mr.

Speaker: Order, please.

Would you

please start over, hon. member.

Hon. R.

Thorpe: Thank you very much, Mr. Speaker, and let me say that our government

is committed to ensuring that the skilled workers needed in the aerospace

industry in British Columbia are trained in British Columbia and have employment

in British Columbia.

We are

talking with OUC, BCIT, Northern Lights, North Island and the manufacturers and

producers here in British Columbia. In fact, I am participating in a conference

call this afternoon with people concerned with this file. We are working in

partnership.

We will not

have jobs for power and forest jobs and make all kinds of promises to British

Columbians that you could never deliver on. We will ensure that our advanced

education facilities produce skilled workers so that our industries can have

people employed to do the job here in British Columbia.

MANAGEMENT OF COQUIHALLA HIGHWAY

Krueger: Mr. Speaker, like you, I've driven the Coquihalla hundreds of

times….

Interjection.

Mr.

Speaker: Order, please. Order, please. Order. We will continue with question

period when the Leader of the Opposition comes to order.

Krueger: She says she's sorry.

Like you,

I've driven the Coquihalla hundreds of times, and as you know, many people in

Kamloops and Merritt and in our region travel that highway pretty much on a

weekly basis. With the changes that were discussed this week, we note that

people who drive the highway every week are going to be saving over $800 a year

with the concession that is planned.

It's also

delightful to see some of the life-saving improvements that are already underway

throughout the heartlands, and we know this is what the money is needed for.

Interjection.

Krueger: The Leader of the Opposition, who spent almost as much money on the

fast ferries as the Coquihalla Highway has raised in tolls in 17 years,

continues to harangue me.

I'd like to

ask the Minister of Transportation what other benefits she sees flowing to the

people of our region as a result of the concession that may be put to an RFP.

Interjections.

Mr.

Speaker: Order, please. The Minister of Transportation has the floor.

Hon. J.

Reid: There are many benefits in our proposal in order to fund the

transportation infrastructure we need. It is very unfortunate that the previous

government, in their ten years, neglected the roads and the infrastructure so

badly, and left a deficit for us to deal with now in a very serious way.

So many of

the projects that we're looking at now were already engineered under the

previous government — were sitting there and just never funded. So, in looking

at the benefits for this, we looked at frequent travellers. As the member says,

the frequent travellers pass will mean that people who use the highway

frequently will pay far less in the future than they've paid in the past,

providing we do this deal. And this deal is contingent on us meeting a bottom

line that the province has set.

[1435]

We have got

the opportunity through this to invest in transportation infrastructure. For

example, in the southern interior alone, over the next three years we're looking

at over $300 million worth of investment.

We're also

looking at more travellers on the highway. More travellers on the highway will

benefit all the communities from Merritt through Kamloops and Kelowna as well.

That's good news for our economy.

[End

of question period.]

Reports from Committees

J. Les:

I have the honour to present the first report of the Special Committee on the

Citizens' Assembly on Electoral Reform.

I move that

the report be taken as read and received.

Motion

approved.

J. Les:

I ask leave of the House to permit the moving of a motion to adopt the report.

Leave

granted.

J. Les:

I move that the report be adopted.

In moving

adoption of the report, I wish to note that the committee has reviewed the

nomination of Dr. Jack Blaney as chair of the Citizens' Assembly on Electoral

Reform. In fact, the committee interviewed Dr. Blaney this morning and

unanimously endorses his

[ Page 6618 ]

nomination. He is eminently qualified to undertake this work, and he is keen

to get on with the challenge of reviewing, with the members of the Citizens'

Assembly, the manner in which members of this House are elected and subsequently

making a report to the House.

Motion

approved.

Petitions

J. Kwan:

I rise to table a petition. This is a petition for the Public Education is Our

Future campaign. Joining the petition of 5,000 community members who are calling

on the provincial government to adequately fund education is the Vancouver

school board. The document is signed by Adrienne Montani on behalf of the

Vancouver school board.

MacPhail: I rise to join my colleague in tabling the same petition from the

Vancouver school board supporting the Public Education is Our Future campaign.

Orders of the Day

Hon. S.

Hawkins: I call report stage of Bill 14.

[1440-1445]

Third Reading of Bills

COMMUNITY CHARTER

Third

reading of Bill 14 approved on the following division:

YEAS — 42

Coell

Halsey-Brandt

Hawkins

Whittred

J. Reid

Santori

Barisoff

Lee

Thorpe

Hagen

Murray

Bond

de Jong

Nebbeling

Neufeld

Coleman

Chong

Penner

Jarvis

Orr

Harris

Nuraney

Long

Chutter

Mayencourt

Trumper

Johnston

Krueger

McMahon

Bray

Les

Wong

Suffredine

MacKay

Cobb

Visser

Lekstrom

Brice

Sultan

Hamilton

Kerr

Manhas

NAYS — 2

MacPhail

Kwan

Bill

14, Community Charter, read a third time and passed.

Hon. S.

Hawkins: I call committee stage on Bill 29.

Committee of the Whole House

FOREST (REVITALIZATION)

AMENDMENT ACT, 2003

The House

in Committee of the Whole (Section

B) on Bill 29; J. Weisbeck in the chair.

The

committee met at 2:46 p.m.

The

Chair: Members, we will have a ten-minute recess.

The

committee recessed from 2:48 p.m. to 2:54 p.m.

[J.

Weisbeck in the chair.]

The

Chair: I call committee on Bill 29.

On

section

[1455]

MacPhail: My first questions are on

section 2, but I am concerned about….

This bill amends the Forest Act. Legislation was introduced today, just moments

ago, that I think amends the Forest Act. Can the minister explain to me…? I

understand that it's not before us right now, but are we going to have to do

this all over again?

Hon. M.

de Jong: In fact, there are significant amendments to the Forest Act in this

bill. To the best of my recollection, though, they are different sections, and

the legislation tabled today addresses entirely different sections.

MacPhail: I'll just put it on record that this is the fourth, fifth or maybe

sixth time that this minister has amended the Forest Act. We are debating a

very, very important piece of legislation, and I have no idea what context this

particular committee stage debate will have in relationship to the legislation

he introduced in this House moments ago. I say this with the greatest of respect

to the House: we may have to redo this debate we're having right now with the

legislation the minister introduced earlier this afternoon.

I just want

to put into context how one millworker described to me the changes that the

minister has introduced. It's very interesting. He has been in the industry for

most of his adult life, and here's what he says: "The model for B.C.

forestry has been, from the outset, one of managed plantation forestry." In

other words, he says that when all of the old growth was gone, the industry

would be maintained through second growth, and that's described as

"falldown." In other words, the concept of moving from old growth to

second growth, which is always of a smaller volume than first growth…. That

transition is called falldown.

That

falldown is what has driven investment and employment. Job protection plans were

an integral part

[ Page 6619 ]

of this model. The reason job protection plans were an integral part of that

model was because the trees were a public resource. The reason why he brought

this to my attention was because he gets upset when this government talks about

13,000 jobs being lost over the last number of years. Here's what he says:

"Yes, there has been job loss, but it has been more to do with corporate

downsizing, with the technology replacing workers, the consolidation of the

industry, the contracting out of maintenance, the increase of log exports,

product substitution and a lack of innovation to moving up the value

chain."

All of that

is what has caused the job loss, in his view, rather than a failure of the

social contract. The reason he points this out is because this government is

saying that that social contract put limitations on companies, and, therefore,

that's the reason this government is having to rip it up.

In fact, if

it weren't for the provisions of the Forest Act that provided for the social

contract — gaining public good from public resources — the log export market

would be the only business in town. He believes that by repealing the job

creation plans, this government is creating unemployment in British Columbia and

job creation south of the border.

[1500]

Now, when

he explained his view on all of this to me, he said: "It is not as if we

can stop companies from technological change or consolidation, but rather than

just allowing that to now occur without any benefit from the public resource to

British Columbians, we should actually be taking an overall completely different

view of how we manage our forests." It isn't just a matter of where we can

clearcut now and rely on second growth to provide the same amount of resource as

did first growth. This legislation, rather than being forward-thinking at all,

is actually allowing the companies to get away with all of the negative impacts

that have occurred in communities and still have unfettered access to a public

resource.

I thought

that was extremely interesting. I put that on the record for the minister in

order to allow him to contemplate the point of view of a millworker as we go

through this legislation.

My first

questions in this area are on

section 2, so I shall allow

section 1 to pass.

Section 1

approved.

On

section

MacPhail:

Section 2 of Bill 29, the Forest (Revitalization) Amendment Act,

actually removes appurtenancy, and it removes other linkages of tenure to

production and jobs.

Section 14 of this bill provides the specifics on how and

when appurtenancy requirements will be removed from licences, but this is the

section that repeals appurtenancy.

I actually

have some very detailed examples of appurtenancy agreements that I want to go

through, but first of all I want to ask a couple of questions about this. This

section repeals

section 14(

f) of the Forest Act and 35(1)(

m) of the Forest Act.

That now means — a forest licence is

section 14(

f) and a tree farm licence is

35(1)(m) — that with the repeal, forest licences and tree farm licences will

no longer need to include provisions for the operation, construction or

expansion of a timber-processing facility.

That's what

appurtenancy is. I know it's a funny word, and it is one that doesn't come

naturally to those of us who are outside the industry, but that's what it means.

If you get trees, you have to commit to an operation, construction or expansion

of a timber-processing facility — and that's gone. Nor will the licence

holders now be required, as a condition of their licence, to carry out specified

measures to meet the objectives of the government in respect of any of the items

referred to in

section 13(4) in the instance of a forest licence and 33(5)(

a) to

(

e) in the instance of a tree lot licence.

In sections

13(4) and 33(5) of the current Forest Act we note that the minister must, in

awarding a forest licence, consider and evaluate the potential for the licence

holder to do the following: create or maintain opportunities and other social

benefits; manage and utilize Crown timber; further the development objectives of

the government; meet the objectives of the government in respect of

environmental quality and management of water, fisheries, wildlife and cultural

heritage resources; and contribute to government revenues. That's all gone now.

What we have here is the removal of the requirement for those conditions and

objectives from the actual licence. They still have to be considered in awarding

the licence, and I will get to that in a moment — about what that means.

First of

all, I want to review with the minister right now appurtenancy agreements that

do exist. We had a bit of this discussion under Bill 27, but I want to actually

go through several examples of appurtenancy agreements that exist right now. I

want to ask the minister what's going to happen when this legislation is passed

and these documents are now illegal.

[1505]

The first

one is the forest management licence 1, Skeena. These are actually historical

documents. The first one is from the 1940s. I'll just read what it says.

"This licence is issued on the understanding that the licensee will build

and have in operation on Watson Island, on or before December 31, 1952, a plant

designed to produce 80,000 tonnes per year of unbleached pulp, paper or

cellulose." That's from the late forties. It's an appurtenancy clause. It's

an appurtenancy agreement.

What's the

history of it? Well, in 1970 it is again renewed — a forest operations

agreement between Skeena Kraft Ltd., TwinRiver Timber Ltd. and Celgar Ltd. It

says:

"Whereas

Skeena owns and operates two pulp mills on Watson Island, near Prince Rupert,

British Columbia, and it or its associated companies operate a sawmill and may

in future operate other sawmills or plants for processing wood in the northern

area; and

whereas for the maintenance of such mills, sawmills and plants

[ Page 6620 ]

Skeena owns lands on which it must cut timber and rights to

cut timber on other lands…."

So there it is. It was renewed in 1970 under an appurtenancy agreement.

It was

renewed again on July 10, 1986. It's still tree farm licence 1. It was renewed

again in 1998. It says in 1998:

"The

Licensee will process all timber harvested under a cutting permit or road

permit, or equivalent volumes, through a timber processing facility (

a) owned

or operated by the Licensee or an affiliate of the Licensee within the meaning

Section 53 of the Forest Act, and (

b) equipped to carry out debarking and

chipping, unless the Minister exempts the Licensee in whole or in part from

the requirements of this paragraph."

That's still in effect.

So what

happens? This is an appurtenancy agreement. If this legislation passes, what

happens?

Hon. M.

de Jong: In fact, it is not any longer an appurtenancy provision, as the

member defined in her question. The significant moment — and I am relying upon

the information she has provided — apparently occurred in 1998. Again, I'm

relying on what the member has related to the House here, but in 1998, based on

what she has just provided, that mill-specific appurtenancy provision became a

timber-processing requirement. That provision, based on what she has referred

the House to in 1998, says that that timber must be processed by that company

anywhere.

I'm not

meaning to be argumentative, but we should — because there are provisions in

this bill that deal with timber-processing requirements…. That is different

than appurtenancy, which is a mill-specific requirement. Apparently, in 1998 the

government of the day decided there would no longer be an appurtenancy provision

in that contract and changed it. So we're talking about apples and oranges to

that extent.

R. Lee:

May I have leave to make an introduction?

Leave

granted.

Introductions by Members

Lee: It gives me great pleasure to introduce to the House 27 grade 5

students of St. Helen's School from my riding of Burnaby North. Joining them is

their teacher, Ms. Natola, and teaching assistant, Mr. Kanosa, as well as

several parent volunteers who have taken time out of their busy schedules to

accompany these students, including Mrs. King, Mrs. Renaldo, Mrs. Dube and Mrs.

Kavolchuksigh.

I am also

pleased to hear that one of the teachers in this school, Mrs. Jussinoja, is also

a daughter of the hon. member for Malahat–Juan de Fuca.

Would the

House please give our visitors the warmest welcome.

[1510]

Debate Continued

MacPhail: Well, I'll tell you. The minister made that argument in Bill 27,

and the workers are furious at him for making that argument. That's why they've

provided me with all of this information.

The changes

that have arisen in the forest management licence 1 are directly as a result of

the appurtenancy clause. These changes would not have been able to take effect

or be negotiated unless there was an appurtenancy clause. In other words, the

minister is correct that in 1998 the processing could take place across the

northwest, but it was as a result of the appurtenancy clause that the company

had to agree to this.

That's why

when the minister stood up the last time and said, "Oh, that's not an

appurtenancy arrangement. Sorry, you're wrong. It doesn't have anything to do

with it," the workers immediately called and said that it was only because

of the appurtenancy clause that that kind of agreement could be negotiated.

It starts

out with an appurtenancy, and that's why I gave the minister the history from

the 1940s. The negotiations that result in this tree farm licence are as a

result of the appurtenancy agreement, the appurtenancy clause. Yes, the terms

have changed. But there would be no requirement to process if there were not an

appurtenancy clause. They called in, in droves to make that clear to me, for me

to bring up with the minister.

But even

given what the minister is saying, then…. Let's call it a provincial

appurtenancy clause.

Interjection.

MacPhail: The minister stands there and says that it's a timber-processing

clause. It's a requirement to produce jobs with the trees, and that's gone now.

Is that gone under this legislation?

Hon. M.

de Jong: The member is getting all worked up, and she may do that, but I

will try to be as candid as I can.

The link

that has historically existed between harvesting and then the same company

having to process disappears with this legislation. I hope no one thinks I'm

trying to be coy about that, because I've gone around this province making that

very point. But if the restrictions around the export of that fibre remain as

they are, then the logs are there, and they must be processed within British

Columbia.

Now, they

may not be processed by the same company. The member would say that they may not

be processed in that exact facility, but in 1998 the government of the day

decided that wasn't a policy they wished to pursue. They said to the company in

that case: "You may process that fibre anywhere in British Columbia at a

facility you own."

Yes, we

have gone a step further, but let's not accuse me of being coy. We're breaking

the link that says if you harvest it, you must process it.

MacPhail: How will the minister then…? Is the minister somehow saying,

then, that he's keeping a provincial appurtenancy clause?

Hon. M.

de Jong: The member can describe it in whatever terms she wants. The

restrictions around

[ Page 6621 ]

exporting unprocessed logs remain. The fibre must be processed in British

Columbia.

MacPhail: Well, no. I'm labelling it a provincial appurtenancy clause. Is

that wrong?

Hon. M.

de Jong: If by labelling this a provincial appurtenancy clause the member

means that the fibre must be processed within British Columbia, then I agree.

MacPhail: That will come as a great relief to the workers. I'm not sure it

will come as a relief to the companies, because the companies can't have it both

ways. We'll just see how that works out. But I will also say that the

ability….

I'm sorry.

Maybe the minister can introduce his staff.

Hon. M.

de Jong: Thanks to the member. On my left, Bruce McRae; on my right, Richard

Grieve.

[1515]

MacPhail: It will be interesting to see how the minister enforces such a

provincial appurtenancy clause when there's nothing in the legislation to demand

thus. Now he says — and he tried to do that in the bill we debated earlier —

that the fact that there is a requirement to process the logs in British

Columbia…. People called in and said: "But everything else has been

stripped away, and there is no way to enforce that." Absolutely none. It's

a nice, empty statement.

Let me ask

about this, then. Here's the tree farm licence number…. Let me just conclude

with the Skeena one, then. Skeena isn't operating now. Skeena Cellulose is not

operating. Is that correct?

Hon. M.

de Jong: That's correct. The only other point I would make, arising out of

the member's comment as it relates to log exports, is that that hollow regime

that I think the member was referring to is precisely the same one she and her

government presided over for upwards of a decade. So if it's hollow now, it was

hollow then. In fact, we've just debated a bill where we describe how we're

tightening up the

definitions around what qualifies for export.

MacPhail: I guess the thousands of members that were working up there in the

1990s and aren't now would probably stand up and agree with the minister that

nothing's changed. Balderdash. The unemployment rate is 55 percent. It

skyrocketed under this government because this government sold the mill to a

person without any requirements that he keep the logs in British Columbia and

use them — to process them anywhere. So those people who….

Interjection.

MacPhail: No, they're not the same terms. The minister allowed the new owner

of Skeena to export 35 percent of the annual allowable cut, and that's exactly

what they're doing.

Harris: No, it's not.

MacPhail: That's exactly what they're doing. Well, maybe the member would

like to get into the discussion, because it's what the Minister of Forests said

the other day. But feel free to get into the discussion and ask, because maybe

the Minister of Forests will give you a different answer. But that's exactly

what he said. Every…

The

Chair: Order, members. Let's address the Chair, please.

MacPhail: …single log being cut now is being exported. It's not up to 35

percent of the annual allowable cut, but every single log that's cut down is

being exported. Get in the game, and explain how it isn't happening. Maybe he'll

actually stand up and represent the 55 percent of people unemployed in his

riding. Maybe he will, because they're the people e-mailing and calling me.

They're the people e-mailing me and saying: "Will you raise these

concerns?"

Could the

Minister of Forests get on top of his file and understand that he made a big

change when he sold Skeena Cellulose — a big change — and that's why the men

and women up there are unemployed, and that's why they're so upset with his

comments. God forbid that they even begin to describe the representation of

their MLA.

Selkirk

tree farm licence 55. This is from 1992. Timber processing: "The licensee

will not close or reduce the production of its timber-processing facility at

Malakwa for a sustained period of time unless and to the extent that the

licensor or his designate exempts the licensee from the requirements of this

paragraph." In 1999 it was renewed. What happens to that?

Hon. M.

de Jong: How is it renewed?

MacPhail: "The licensee will process all timber harvested under a

cutting permit or road permit or equivalent volumes of timber or wood residue,

excluding hog fuel obtained directly or indirectly through a timber-processing

facility owned and operated by the licensee and an affiliate of the licensee

within the meaning of

section 53(1) of the Forest Act."

[1520]

Hon. M.

de Jong: Again, I'm relying upon what the member is providing, and I have no

reason to believe it wouldn't be accurate. Apparently, in 1999 the government of

the day decided it made no sense to tie that fibre to a specific processing

facility and opted instead to say to the licensee: "You may process that

fibre anywhere in British Columbia at a facility you own."

MacPhail: Right.

[ Page 6622 ]

Hon. M.

de Jong: Well, we have gone one step further. We have said: "That fibre

must be processed in British Columbia, but if there's another facility that can

make better use of it and you just don't happen to own it, sell it to

them."

MacPhail: Well, how do you answer the workers who work for this company,

then? Are they just written off?

Hon. M.

de Jong: Let me give the member an example of a town and an operation where

there is an appurtenancy provision. The mill is shut down. No one's working

there. The operators of that mill own another facility. The way they keep that

second facility operating is that they take the fibre that is tied to the first

one and send it to the second facility. That's how they keep those people

working.

To apply

the specifics of the appurtenancy laws as they agree now would mean that the

government could take that fibre away, and now you'd have two mills shut down.

Now, that makes a heck of a lot of sense. The better use of that fibre in this

case is actually five kilometres down the road at a second facility, and that's

where it goes. It keeps that second facility operating, employing those people.

The first facility is still shut down, but if we apply the appurtenancy

provisions as they exist today in the way that many people would call for, both

mills would be shut down. Well, that's stupid. If the fibre is better utilized

at the second facility and those people can derive employment and an income as a

result, well, then that's probably what should happen.

I will tell

the member this candidly. I don't feel particularly competent to decide, from an

office in Victoria, where the fibre should go between two mills located five

kilometres apart. Maybe that's the difference.

MacPhail: No. The minister is missing the argument the workers are making. A

licensee derives benefit from using British Columbia logs, publicly owned logs.

The licensee has absolutely no responsibility to use that now, under this

minister's legislation, to provide employment within the realm of his or her

shop at all. That is true. The workers aren't even going to get the opportunity

to move down the road to the second mill that may operate. There's absolutely no

obligation on anyone to those workers on a company basis under this new

legislation — absolutely none. There's no obligation to provide anything to

the community around which the logs were. That's the difference. It isn't what

the minister describes at all, the example he describes. What the minister is

going to be giving away is any requirement to provide good jobs to people who

have committed to that community and to the community itself. They're absolutely

gone.

[1525]

I want to

read this, on the Selkirk tree farm licence. The minister said: "Oh, that's

exactly what we've gone to in 1999 — a provincial appurtenancy." By the

way, his legislation is not providing appurtenancy as people knew it at all.

Here's clause No. 15.04: "The licensee will continue to operate and, where

applicable, construct or expand a timber-processing facility in accordance with

the proposal made in the application on which the award of the tree farm licence

replaced by this licence and any predecessor to that tree farm licence was

based." It was renewed with the original obligations there in 1999. I read

the original obligation, 1992, the Malakwa mill. So what happens to these people

now when the legislation is passed?

Hon. M.

de Jong: I think there is a significant difference of opinion about how it

is that you ensure we can return to a day when we've got a healthy forest

sector. There was a time when politicians exerted a tremendous amount of

influence in attempting to determine what should happen and where fibre should

be allocated. Some of the provisions we are dealing with date back decades and

have been utilized with that in mind. The member has heard my opinion on where

that has brought us in the year 2003, given a whole range of changes that have

taken place — in the world, in British Columbia — and how they have impacted

the forest sector in British Columbia.

I am going

to make the point, without any expectation that this member is going to be

convinced, that we are in a better circumstance when we create a framework in

which the fibre can flow freely within British Columbia. This scenario — which

some would paint — that as a consequence of the passage of this legislation,

mills of the sort the member has described are going to disappear off the map,

simply isn't so.

The point

is this: the fibre remains. The harvesting continues. Now, the harvesting might

be conducted by someone that doesn't own any processing facility, and we have

all kinds of that right now. We've got market loggers; we've got contract

loggers. They don't have processing facilities. They don't eat the wood. They

sell it. They sell it to processing facilities that have been built and that

employ people.

So that

separation, that severing of the link between harvesting and processing, is, I

understand, something that greatly offends the Leader of the Opposition and some

of the people for whom she is asking questions. I can tell her that there is a

whole other group of people out there who believe it is precisely what needs to

be done: processors and loggers — processors that have been existing out there

with virtually no renewable fibre whatsoever. And on balance, I will say to the

member, they tend to be the most competitive operators out there because they've

had to live by their wits to find that fibre.

I'm not

going to convince the member. It's appropriate for us to have this exchange and

hear the views of people that don't share my own. But again, I want to be as

forthright as I can about what the objective is here, and it is to dismantle or

sever that historic relationship.

MacPhail: In second reading I predicted there would be one supermill,

probably in the lower

[ Page 6623 ]

mainland. And that's exactly what's going to happen by this legislation.

Based on

the minister's comments, I am going to return to ask him to comment on the

millworkers' view of why the industry has lost the jobs at the beginning. I'll

reread it for him. But I want to finish the discussion on these two first,

especially since the member for Skeena seems so ill-informed about what's

happening in his own community.

[1530]

This tree

farm licence 1, which applies to his community, actually has this clause in it:

"The licensee will continue to operate and where applicable construct or

expand the timber-processing facility in accordance with the proposal made in

the application on which the award of the tree farm licence replaced by this

licence or any predecessor to that tree farm licence was based." It's an

appurtenancy clause. That's tree farm licence 1, which applies to Skeena.

As soon as

this government came in, the logs were allowed to be shipped offshore 100

percent — 100 percent. That's why there's 55 percent unemployment, and that's

why there wasn't 55 percent unemployment until this government came in.

Interjection.

MacPhail: That's why. How dare the member for Skeena try to suggest

otherwise? Feel free to get into the debate with those 2,000 or 3,000 people

sitting at home because his government got elected. Feel free to jump in.

All I'm

trying to figure out is this. Is everything going to be happening like it is now

with Skeena Cellulose and the man who bought that licence — that everybody's

going to be allowed to do what he's done, which is not create one job anywhere

in the province? And what's going to happen to the people at Malakwa?

Here's the

other clause from the Selkirk tree farm licence. It's No. 55 again. We've dealt

with No. 1 — that there was an appurtenancy clause until this government took

over. Here's this. It says this for the Selkirk one: "The Licensee will not

close or reduce the production of its timber-processing facility at Malakwa for

a sustained period of time, unless, and to the extent that the Licensor, or his

designate, exempts the Licensee from the requirements of this paragraph." To

date, that hasn't occurred.

There are

people who have worked there for their whole adult lives. What happens to them

now? What guarantees do they have?

Hon. M.

de Jong: The question the member puts suggests to me that she is of the view

that the only reason there is a processing facility operating in Malakwa is

because of the insertion of a particular clause within the licence agreement.

That's fundamentally at the heart of her question — that with the passage of

this bill, that mill will disappear.

First of

all, I disagree fundamentally with that assertion. People who are in the

processing business are in that business because as long as they can continue to

produce a product economically, that's what they want to do. That's the business

they're in. In order to carry out that business they have to be able to acquire

fibre. At the end of the day, in order to sustain that business they've got to

be able to acquire the fibre, they've got to be able to produce the product they

produce, they've got to be able to pay their employees, they've got to be able

to maintain their equipment, and they've got to be able to sell their product.

When they sell their product, they've got to at least be able to cover the cost

of all the previous items.

If you

can't do that, it doesn't matter what's in the licence agreement because it will

go away. There is a litany of evidence of that. If there are people — and

there are, and I guess this member is one of them — who think you can ignore

that reality by clinging to a set of policies and statutory provisions that

ignores the reality of what is taking place out there in communities and within

the industry, then that is their view.

It is not

mine, because I have seen too much evidence of what has taken place under that

existing regulatory framework.

[1535]

MacPhail: Could you provide me with that evidence, please?

Hon. M.

de Jong: Unhappily, I can, Mr. Chair. It is mill closures in 28 communities;

it is spiralling unemployment levels. I can provide all of that information to

the member. I would have thought that at least for the term her government held

office, she would have had that etched in her memory.

MacPhail: I want specifics. How dare the minister stand up and just make a

broad statement like that. I want the specifics — where the appurtenancy

clause, the social contract, led to a mill closure.

Hon. M.

de Jong: Well, in fact, I will provide some specifics to the member about

facilities that have shut down and have been subject to appurtenancy provisions.

If you are obliged to operate a facility — and I know the member doesn't like

to hear this — that can no longer be operated efficiently but are compelled to

do so by a set of governmentally imposed policies, then at the end of the day

the competitiveness, firstly, of that business and, secondly, of that overall

industry is going to be compromised, and that's what's happened.

If the

member has gone now almost two years without having reviewed the Peter Pearse

report — someone, I might add, I have heard no one describe as a partisan….

In fact, the last time he looked in detail at the B.C. forest sector, it was at

the behest of an NDP government. If she would take the time to review what he

had to say about the impact of these policies — and I'm happy to send the

report over to her — then perhaps she wouldn't have had to ask that last

question.

MacPhail: Oh God. What are you trying to test — whether I've read the

Pearse report? He said 17 mills

[ Page 6624 ]

would close. I'm asking the minister for his evidence. Dr. Pearse predicted

17 mills would close. I'm asking the minister for his evidence. Dr. Pearse did

not relate it to the social contract. He did relate it to changes in timber

market pricing, yes. But not to the social contract.

There is a

fundamental difference of opinion here. This minister stands and advocates for

the forest companies and the forest companies alone, as does the member for

Skeena, as does everybody who sits with the Liberals. The forest companies

hurrah, and they're fine if there's one supermill in Vancouver. Who knows? It

may be in my riding. How does that help the members' constituents from Prince

Rupert or the Kootenays or Houston, Quesnel, Williams Lake or Comox? Maybe East

Vancouver will rule.

But my

point here, on behalf of the working people of the province, is that there was a

social contract between the use of a publicly owned resource and the profits of

the forest company, and that's gone now. That's being ripped up by clause 2

because the minister says that social contract impeded the profits of the

industry. That's what he said.

[1540]

In fact, he

couldn't care less how many mills move around, how many people lose their jobs.

He told me that the other day when I asked him about the Canfor consolidation

and the closure of mills. His bureaucrats didn't know anything about it; he

didn't know anything about it. He didn't know that there were going to be a

couple of hundred people laid off — net — because he doesn't care, because

Canfor is still happy. But the communities and the workers are left behind,

abandoned. I'm asking the minister for evidence that the social contract impeded

the forest companies' ability to be profitable. We will get into specific

questions later on.

I opened up

my comments with a millworker's analysis that said the job loss over the years

had to do with corporate downsizing, technology replacing workers, consolidation

of the industry, contracting out of maintenance, increasing log exports, product

substitution and a lack of innovation moving up the value chain — not the

social contract. I didn't ask the minister for a reply. Maybe he could reply.

He's watching; the millworker is watching.

Hon. M.

de Jong: If I'm going to provide an answer directly, I may have to ask the

member to re-put the question to me.

MacPhail: This millworker says that this government is accusing the social

contract — the social contract being appurtenancy, cut control, notice of mill

closure — as being the villain in the downturn of the industry, the loss of

jobs. I asked the minister for evidence of that, and he said he'd get it for me.

He referred to the Pearse report, and that is not the link the Pearse report

makes. This millworker is saying it is not those factors.

These are

the factors that led to it. The 13,000 jobs lost had to do with corporate

downsizing, technology replacing workers, consolidation of the industry,

contracting out of maintenance, increasing log exports, product substitution, a

lack of innovation moving up the value chain.

Hon. M.

de Jong: In fact, what I'm saying is a couple of things.

First of

all, when you impede any business's opportunity to respond and adjust to

significantly changed circumstances — surely, no one is suggesting that this

industry hasn't been confronted by some changed circumstances — that is a

recipe for disaster. Is it the only feature at all? Is it the only feature that

has contributed to the decline of this industry? I don't think so. I think the

fact that we have to compete now with products supplied by parts of the world we

never had to compete with has had an impact. I think market conditions have had

an impact. I think decisions that have been made around land use have had an

impact. I think our need to get on with resolving first nations issues has had

an impact. I think all of these things have had an impact.

It is

interesting, when I consider that the decline the member referred to in her

question in fact began to accelerate at the very time the previous government

actually ratcheted up the social contract, because that's what the jobs and

timber accord was. It was an amplification of that very strategy. Ironically,

all of those ill effects, all of those negative consequences that the member has

referred to, began to occur and accelerate within a regime that actually

represented an enhanced social contract.

[1545]

So is it

the only thing that has contributed to our forest sector's inability to perform

at levels we all want it to perform at? No. But it has, in my view, surely

contributed to our forest sector's inability to perform at levels we all want it

to.

MacPhail: Boy, everybody is at fault except the forest companies' management

themselves, according to this minister — everybody. He continues to rail about

the previous administration. Whatever. He won the election, and things have

gotten in a decline like we've never seen before in the industry. I guess maybe,

based on his logic, we can only blame the Liberal government for the decline.

I put

questions to him from a millworker that were absolutely legitimate about whether

he has looked into the corporate restructuring, about the changes that have

occurred in the industry. Rather than attack the social contract, accept that as

the changes that have occurred. No, what this minister does is try to blame

politicians of the past and a horrible social contract that now, with its

removal, will attack the workers and the communities. He's willing to leave the

corporate entities, who perhaps themselves have been responsible for the job

losses, completely off the hook — leave them completely off the hook.

Of course,

we don't have an answer for the people who work at the mill at Malakwa. We just

simply don't have an answer. If the day this legislation passes that em-

[ Page 6625 ]

ployer decides to leave town, knowing that this contract they were under is

now null and void, I guess the workers will just have to say: "Oh well,

whatever. Thank goodness that the company is profitable. We've lost our jobs.

Our communities lost the jobs, but the company's fine."

By the way,

these are appurtenancy agreements, and they do exist. I'm happy to be able to

bring them to the attention of the minister, because he said that they didn't

exist. Here's one: Boundary Creek forest management licence No. 8, original

"This

licence is given for the maintenance of a manufacturing plant or plants

capable of utilizing subject as hereinafter provided not less than 1.5 million

cubic feet of wood per year, provided also the said manufacturing plant or

plants shall be maintained in operation on the licensed area or within a

distance of one mile of the highway between the town of Kettle Valley on the

west and the town of Eholt on the east.

"This

licence shall be appurtenant to the licensee's mill or plant as

provided in clause 2 hereof, and not less than 80 percent of the annual or

periodic saw log cut shall be processed in the licensee's mill or plant unless

permission in writing is given by the minister to process less than 80

percent. Such permission, if given, shall not extend to a period of more than

one year under any permit" — 1981.

was renewed in 1980, and it was added that they had to give not less than

three months' notice if there was going to be any reduction in capacity of

timber, but pursuant to the original licence. Tree farm licence renewed, 1995.

"The licensee will process all timber harvested under a cutting permit or

a road permit or equivalent volumes through a timber processing facility (

a) owned or operated by the licensee, (

b) equipped to carry out debarking and

chipping."

It's got

clause 16.04, standard back in those days: "The licensee will continue to

operate and, where applicable, construct or expand a timber-processing facility

in accordance with the proposal made in the application on which the award of

the tree farm licence replaced by this licence or any predecessor to the tree

farm licence was based."

[1550]

What

happens to those people? I'm sorry. It was renewed again in 2000 — exactly the

same.

Hon. M.

de Jong: I'm probably better equipped to answer the question if I either

obtain or receive from the member a copy of the 2000 renewal.

MacPhail: I'll read it word for word. Tree farm licence No. 5, renewed March

1, 2000, timber processing.

"The

licensee will process all timber harvested under a cutting permit or road

permit, or equivalent volumes of timber or wood residue excluding hog fuel,

obtained directly or indirectly, through a timber-processing facility owned or

operated by the licensee or an affiliate of the licensee within the meaning of

section 53(1) of the Forest Act, unless the minister exempts the licensee in

whole or in part from the requirements of this paragraph.

"15.02.

If the licensee (

a) intends to close a timber-processing

facility or reduce its production or (

b) has reason to believe that an

affiliate of the licensee within the meaning of

section 53 of the Forest Act

intends to close a timber-processing facility or reduce its production for a

period of longer than 90 days, the licensee will give the minister at least

three months notice prior to the closure or reduction.

"15.03.

If (

a) the licensee or (

b) an affiliate of the licensee within

the meaning of

section 53 of the Forest Act closes a timber processing

facility or reduces its production for a period of longer than 90 days, the

licensee will, on request of the minister, provide information regarding the

volume of Crown timber processed through the timber processing facility during

the 24-month period immediately preceding the closure or reduction in

production level.

"15.04.

The licensee will continue to operate and, where applicable,

construct or expand a timber processing facility in accordance with (

a) the

proposal made in the application on which the award of the tree farm licence

replaced by this licence or any predecessor to that tree farm licence was

based and (

b) the revisions, if any, to that proposal."

Hon. M.

de Jong: I'm obliged to the member for reading it in its entirety. To the

extent that one could argue that a mill-specific appurtenancy provision exists

there — and by virtue of the final clause, I think someone could argue that,

although it tends to fly in the face of the earlier part of the document —

that obligation will no longer exist if this legislation passes.

MacPhail: What happens to the people who work there?

Hon. M.

de Jong: Nothing, I expect.

MacPhail: What if the company wants to close the mill? Can they do it

overnight? What happens to the workers who work in the mill, if the company

closes operations?

Hon. M.

de Jong: I expect that they would be entitled to either the severance

provisions or other provisions of the contract that guides their relationship

with their employer.

MacPhail: I guess we have people relying either on employment standards, if

they're non-union, and, if they're union, their collective agreement. The

company gets the trees and the profit. The community gets nothing, and the

workers get nothing.

The reason

I'm reading these into the record is because the minister said, I think, during

our debate on 27 that there weren't appurtenancy agreements left.

Interjection.

MacPhail: Well, we can certainly check. The minister said there were none

left, and when I brought two to his attention, they said: "Oh no, those

aren't appurtenancy agreements. They arose out of negotiations from getting out

of appurtenancy."

[1555]

Mackenzie-Cariboo

forest management licence No. 5. Again, it was established in the 1950s. It

says: "The

[ Page 6626 ]

forest management licence may be referred to as the Mackenzie-Cariboo forest

management licence No. 5. This licence is given for the maintenance of

manufacturing or plants capable of utilizing subject as hereinafter provided,

not less than 1.5 million cubic feet of wood per year, provided also the said

manufacturing plant or plants shall be maintained in operation within a radius

of five miles of the town of Quesnel or on the licence area or within ten miles

of the boundary of the licence." It was renewed in 1980 and 1995, and again

it was renewed in 2000 — exactly the same language as I just read into the

record for Boundary Creek.

[H.

Long in the chair.]

Tell me,

Mr. Chair. I have had dozens of tree farm licences. I'm wondering whether the

minister can tell me how many such agreements that I just read into the record

apply to how many tree farm licences, because we're ending these agreements.

What we're doing right now is debating the ripping up, the declaring null and

void of these contracts. I have tree farm licence 1; we've already dealt with

that. We've dealt with 5, we've dealt with 8, and we've dealt with 55. So here

are the ones that are left: 3, 6, 10, 14, 15, 18, tree farm licence 19, 23, 25,

26, 30, tree farm licence 33, 35, 37, 38, 39, tree farm licence 41, 42, 43, 44,

45, 46, tree farm licence 47, 48, 49, 52, 53, 54, 56 and 57.

Hon. M.

de Jong: The information I have indicates that with respect to major

replaceable licences, and by that I am including both TFLs and forest licences

that carry a combined AAC of about just under 51 million cubic metres,

approximately 2.1 million cubic metres have mill-specific appurtenancy clauses.

MacPhail: Mr. Chair, could he just repeat the last part of that, please?

Hon. M.

de Jong: To the member, the last figure I gave was approximately 2.1 million

cubic metres.

Manhas: I seek leave to make an introduction.

Leave

granted.

Introductions by Members

K. Manhas:

I have the pleasure of introducing to this House 24 kids from Maple Creek Middle

School in Port Coquitlam. They are students from the Tri-Cities of Port

Coquitlam, Coquitlam and Port Moody, and they're here with 23 kids visiting from

their twin school of Miramichi Rural School in New Brunswick. They've been

twinned together as part of a YMCA youth exchange program. Those of you who have

a little bit of knowledge of New Brunswick politics will recognize that

Miramichi was the home riding of the past Premier of New Brunswick, Frank

McKenna.

Miramichi

is a school of 75 kids from kindergarten to grade 8, and 23 of them are here

visiting today. I'd like to make a welcome to Principal Bill Campbell from their

school and to Laurel Whatley from Maple Creek Middle School. I'd also like to

recognize the parents who have done a lot of work to pull this together. It's

been, specifically, Jane Gibbons and Monica Foster who have worked tremendously

hard to organize these trips and organize all the activities. I'd like to thank

both of the communities who fundraised to host each other through things like

clothing drives and spaghetti nights and other innovative fundraisers. So thanks

to work of the parents and students and their communities and the generosity of

those communities, all these students have the ability to have this wonderful

experience.

[1600]

Would the

House and all the members please welcome the students from the Tri-Cities and

please make the students from Miramichi, New Brunswick, very welcome.

Debate Continued

MacPhail: I want to concentrate on, as an example, the Boundary Creek forest

management licence, licence 8, because I think we're finding out very quickly

that this document — the minute this legislation is passed — is ripped up.

It's tossed aside; it's outlawed. So I want to work on what the effect of that

is.

The

minister makes the argument that once this is gone, the forest companies can

take what I would call the easy way out. They can leave the communities, abandon

the communities, and take the fibre with them. There's no longer any obligation

at all on the part of anybody to extract from the companies an effort to work

within the community to obtain efficiencies. What happens to the mills attached

to TFL 8 when this legislation arrives? Does he know what mills are going to

shut down?

Hon. M.

de Jong: The question suggests that a mill in a particular area is destined

for closure, and I'm not certain that is correct.

MacPhail: Now, this TFL 8 has 1.5 million cubic feet of wood per year

attached to it. Well, no. The original one was 1.5 million cubic feet. The

minister says there's only…. I'm sorry. Did you say there's only 2.1 million

cubic metres of wood tied to appurtenancy clauses? Is that what you said?

Hon. M.

de Jong: The data I have is that licences with enforceable mill-specific

appurtenancy provisions capture just over 2.1 million cubic metres of fibre.

MacPhail: Well, I've already tabled appurtenancy arrangements that I think

exceed that by quite a bit, so I'm not sure where the minister is getting his

figures. This one alone is 1.5 million cubic feet. I understand that, but I just

tabled the other one too. The Mackenzie-Cariboo is exactly the same amount, and

so are a cou-

[ Page 6627 ]

ple of the others that I tabled. I think the minister is underestimating the

importance.

Well,

anyway, let's carry on with just the forest management licence 8. In it, clause

16.04 says: "The licensee will continue to operate and, where applicable,

construct or expand a timber-processing facility in accordance with the proposal

made in the application on which the award of the tree farm licence, replaced by

this licence or any predecessor to that tree farm licence, was based." The

original one was that you had to be within a certain geographic area: one mile

of the highway between the town of Kettle Valley on the west and the town of

Eholt on the east. We may look on this as old-fashioned and charming, but it's a

legal document.

[1605]

Does the

minister have any information about what mills are currently operating in TFL 8?

Surely, with the ripping up of a contract, a legally binding contract, the

minister would understand the implication or know the effects of the implication

of making that contract null and void.

Hon. M.

de Jong: I can certainly obtain the information as it relates specifically

to the TFL. I'm going to suggest to the member that in terms of assessing the

impact of the legislation, whether one is for it or against it, the contract is

not null and void. The legislation does — and in particular the

section the

member referred to earlier, the

section coming up later in the legislation —

impact a specific clause of some of those agreements, but the agreements are not

null and void.

MacPhail: Well, then, have there been discussions about, for instance, the

Aspen planer mill in Merritt? Is it part of the TFL? Riverside mills, Kelowna,

Princeton — part of the TFL? They are operating in TFL 8, and they will be

affected by the tearing up of this contract. I can't see anything in the

legislation that does anything except make this contract null and void. Or else

perhaps the minister could tell me what discussions his ministry has had,

according to this contract, about closures.

Hon. M.

de Jong: I know the member is not purposely trying to confuse. My

information is that the mills involved in TFL 8 are located at Midway and Grand

Forks. The companies she has referred to — again, my information is that they

are not involved.

MacPhail: Have there been any discussions about the future of those mills?

Hon. M.

de Jong: I happened, on a recent trip through Grand Forks, to visit one of

those facilities, and the very short conversation I had related to their desire

to access more fibre so that they could continue healthy operations.

MacPhail: Is the minister saying that to the best of his knowledge, there

will be no change as a result of this legislation in the TFL No. 8 mills?

Hon. M.

de Jong: With respect…. Again, I am relying on information I haven't

verified, but based on the discussion we've had thus far, I'm aware of no

information and have had no indication that operations would alter or change as

a result of the passage of this legislation.

MacPhail: Well, that's interesting. I was asked to ask that question

specifically by the people operating in TFL 8, so we'll see. I would like a list

of the TFLs that have enforceable appurtenancy contracts, please, making up the

2.1 million cubic metres.

Hon. M.

de Jong: I can obtain a list for the member and will do so.

MacPhail: Okay, I would appreciate that. Clearly, if the minister has come

up with a figure of 2.1 million, the list must be readily available. I would

appreciate that before we conclude the debate on this legislation. That gives

them the weekend to do that.

Interjection.

[1610]

MacPhail: That's exactly…. No, no, you've got plenty of time, believe you

me, through you, Mr. Chair — plenty of time.

On clause

2. I said that this clause eliminates issues the minister must consider in

awarding a forest licence. I'll re-read those into the record, because I have

some questions based on that. Prior to this bill they would have had to

consider: to create or maintain employment opportunities or other social

benefits; manage and utilize Crown timber; further the development objectives of

the government; meet the objectives of the government in respect of

environmental quality and management of water, fisheries, wildlife and cultural

heritage resources; and contribute to government revenues.

Those have

been removed, but they still have to be considered. There's nothing mandatory

about it, but the minister will consider them. If that's still in there, I

assume there must be some validity or necessity to the consideration. So why are

they no longer to be part of the licence?

Hon. M.

de Jong: The first thing I think I would like to offer in response to the

member is that I'm not sure if I either heard her incorrectly or she is,

perhaps, slightly mistaken. The original legislative provisions that are being

dealt with here provided the ability for the Crown to invite applications built

around certain criteria, and if the invitation…. The way those sections worked

is that if the Crown availed itself of that opportunity and listed those various

items as criteria for consideration, then the act logically required that the

decision-maker must take those issues into account. It did not compel the Crown

to include, in every instance, those criteria. But if it did, in advertising the

opportunity, then they had to be weighed in terms of the decision that followed.

The member will know, again, that the direction we are in-

[ Page 6628 ]

tending to move to is access to timber built around a competitive bid model,

and that is ultimately the model that we intend to operate under.

MacPhail: All of those discussions were carried out under the auspices of

the legislation, though. I want to ask specifics about this. If you look at

14(

f) of the current Forest Act, it refers back to 13(4), which requires those

factors to be evaluated, including its potential for each application.

Interjection.

[1615]

MacPhail: Oh. Sorry, Mr. Chair. Yeah, if they're advertised, except that

these TFLs have been around for a long time. Perhaps the minister could explain

the distinction.

Hon. M.

de Jong: I wasn't intending to interrupt the member. The distinction I was

endeavouring to make earlier and just a moment ago was that each offering around

access to timber, each licence opportunity, did not necessarily include all of

these criteria. It was an option available to the Crown. If it did form a part

of the tender criteria, then the person making the decision around the various

bids had to assess those bids taking those criteria into account.

I actually

sought some information and haven't received conclusive information, but it has

been many, many years since a new licence opportunity has been offered on the

basis of the terms set out in 13 and 14.

MacPhail: Well, I have no idea whether that's the case. I have all of my

evidence here that I'm giving to the minister that does include appurtenancy,

for instance, which arises right out of these clauses. I keep asking the

minister for the evidence he has on this matter, and I await it.

So is the

minister saying these objectives are still important?

Hon. M.

de Jong: What I'm saying and acknowledging is that in the future, timber

will be awarded on a purely competitive basis.

MacPhail: Is there nothing in this legislation that says the minister must

consider these objectives? Are they gone completely? I thought I read the

legislation to say that the minister must still consider these factors.

Hon. M.

de Jong: I want to be as forthright as I can with the member. There are

criteria listed there. One of them relates to the return to the taxpayer via

government revenues. We've indicated pretty clearly that that is going to be the

determining characteristic. In subsequent legislation that will be made even

clearer.

MacPhail: Will there be any consideration at all about development

objectives of the government? Is it just revenue-based?

[1620]

Hon. M.

de Jong: With these exceptions, the answer to the member's question is yes.

Those exceptions would be the continued partition in favour of the value-added

sector that will exist within the timber sale program, the expanded community

forest program and the efforts we are making with respect to better

incorporating and involving first nations in the forest economy. With those

exceptions, though, it will be a system built around the competitive bid

process.

MacPhail: I'm sorry. I didn't footnote my notes here. I thought there was

something in here that said that the government will consider social objectives.

Am I misreading it? My apologies, Mr. Chair. I don't have it footnoted.

Hon. M.

de Jong: If it helps the member, I think she might be referring to (4)(

a) within the section. As I've indicated earlier, by virtue of subsequent

legislation, it will be made clear that the determining characteristic is price,

with the exceptions that I referred to a few moments ago.

MacPhail: Where is it — or is it nowhere — that employment objectives

are talked about at all with the use of the public land? I noted the minister

said that he'd been up in the TFL and that he'd been talking to people and that

he was satisfied that it didn't look like anybody was going to be shut down. He

basically has argued vociferously today about why I would be so suspicious to

think that any mill would shut down.

Is he out

there discussing employment objectives? What other TFLs has he gone into, to

discuss employment objectives?

Hon. M.

de Jong: Constructively, to the member, I think we're talking about TSAs as

opposed to TFLs when we talk about getting out in the various areas.

Yeah, we're

talking about creating a future and employment. The difference is, of course,

that we are going to rely to a greater extent than we have in the past on the

ingenuity and entrepreneurial drive of those involved in the forest sector and

remove some of the impediments that have been placed in their path and existed

in their path of late. I'm not going to be shy about acknowledging to the member

right upfront. If anyone is looking in this legislation for the equivalent of a

timber-for-jobs provision, they're not going to find it. That's a very different

way of managing the resource.

A previous

government in another time said: "Your access to the resource that

government controls is going to be contingent upon you promising the government

to do certain things." It didn't work. What happened after the fact, when

these bids would come in, is that one person would say: "I'm going to

create 30 jobs." Another person would say: "I'm going to create 50

jobs." Someone else said: "I'm going to create 75 jobs." The

contract went to the person that said: "I'm going to create 75 jobs."

[ Page 6629 ]

Three years

later it turns out they only created 20 jobs. The two people that had other bids

feel ripped off because the person didn't fulfil the obligation, and the

government's hands are tied because if you take the timber back, the 20 jobs

that the person did produce go down the toilet.

That is a

strategy for how you manage the public resource. I happen to think it is an

unworkable one. I happen to think it is an unfair one, but others disagree. I

hope no one is going to suggest that I am, again, trying to hide the fact that

specific references that say to people: "Your access to the timber is tied

to your ability to convince the government that you're going to produce X number

of jobs…." Those provisions don't exist in this legislation, and to the

extent that they have existed, they don't exist any longer.

[1625]

MacPhail: Well, then, is the government aware of any information about what

changes in employment will occur as a result of this legislation? I mean, we do

have the Pearse report.

This

minister, when he was in opposition, used to talk about 13 mill closures. The

Pearse report talks about 17 mill closures. I guess when the Premier loves to

talk about his only indicator of success in this economy being the creation of

jobs, it's somebody else that gives him that information. What information does

the minister have about employment changes as a result of this legislation, or

does he not care?

Hon. M.

de Jong: In the long term, we believe this industry is going to revitalize

itself and that there are going to be additional job opportunities — perhaps

different opportunities than what have historically existed, and opportunities

in the value-added sector. They may not be opportunities of the historical

variety and primary breakdown facilities, but we think that through a

diversified fibre flow and an expansion of the opportunities available for

participants to get involved in forestry, those employment levels are going to

return to where they once were. That's the objective. That's why one embarks

upon an exercise like this.

MacPhail: My God. Talk about having his head buried in the sand. The only

information recently about consolidation around mills is loss of jobs. The only

effect of mills consolidating and wishing to do so…. I mean, I heard David

Emerson say this, I hear Jimmy Pattison say it, and I used to hear Ike Barber

say it — he's retired — that we need this freedom so that we can

"consolidate." Of course, consolidate is a fancy word for job loss.

Let me ask

the minister: does he have evidence of job creation as a result of this? Are

there some studies or projections that he's got?

Here's the

crux of why I'm asking these questions. If there's no jobs and timber accord,

what do we get for these changes? What do the citizens of British Columbia get

in exchange for giving their publicly owned resource to the timber companies, to

the forest companies?

I asked the

minister for the stumpage revenue projections. I don't have those. Let's have

some evidence of the benefits to British Columbians and not just the benefit to

the forest companies.

Hon. M.

de Jong: It is an interesting proposition to suggest that the forest is

being given to certain major licensees as we debate legislation that is taking

away 20 percent of their licence entitlement. Again, I am baffled by the

assertion that as part of a package that actually takes away 20 percent of their

timber-cutting rights and redistributes it to community groups, to first

nations, to smaller operators, that is — for this member, apparently — the

equivalent of giving it to those major licensees. That's the first observation I

would make in respect of the member's submission.

The second

is this. I can't help, when I listen to her, but think of that antiquated view

of forestry that she appears to embrace. Forestry for her represents nothing

more than a primary breakdown mill. Drive up the Island. Look at them sitting

there empty. If that is your notion of measuring success in forestry, how many

people are employed in a mill that saws 2-by-4s?

[1630]

Well, then,

I guess you might conclude that this isn't your preferred package. But that's

not my notion of forestry in British Columbia. My notion of forestry is creating

a structure that will allow for the maximizing of the value of the timber. If

that means sending a particular type of fibre to another value-added

facility…. You know, I've got a facility in Abbotsford of all places — the

second- or third-largest employer with almost 400 employees. It's a forestry

company. It makes doors and windows. No one even knows it's there.

Those

people make good money. They have skills. They employ the latest in technology.

But you know what? They don't make 2-by-4s. If the measure of success is how

many people in British Columbia are sawing 2-by-4s, well, then that's the

member's measure. It is not necessarily mine.

Indeed,

technology has had an impact on the numbers of employees it takes to produce

that product. No one in their right mind would deny that. Do we wring our hands

and ask ourselves how to insulate ourselves from that? We tried that in the

past. I don't think it's worked. I think what we need to do is get on with

creating a structure that will foster some of those other opportunities that are

out there. But that's me.

MacPhail: Is that the discussion the minister had with the IWA for the last

year and a half?

The

Chair: Shall

section 2 pass?

MacPhail: It's interesting that the minister doesn't want to answer that

question. He likes to get up and sort of rant and rave about something that

isn't even what we're discussing. Absolutely nothing. Then he refuses to answer

the question about the very people who are going to be affected by this.

All I'm

asking the minister is: what is British Columbia getting for this breaking of

the social contract? Not jobs. Fair enough. We have no idea what the

[ Page 6630 ]

stumpage revenue is going to be. The minister can't provide that. He's had a

few days to do that and hasn't been able to.

So all I'm

asking is: what do we get? What do British Columbians get for giving this

publicly owned resource to companies? It's publicly owned. The minister stands

up and tells some story about Doorland, which we all know about.

Hon. M.

de Jong: It's not Doorland. Don't make accusations — okay?

MacPhail: Oh, okay. I love Doorland.

Interjection.

The

Chair: Order.

MacPhail: I love Doorland.

The

Chair: Order.

MacPhail: I don't know what the minister's getting so upset about.

The

Chair: I think we should address the Chair, please.

MacPhail: Well, put the company on record. I don't know what he's getting so

upset about, Mr. Chair. Doorland is in his riding. It's a very successful

company. It's exactly as he described. Good on them. I mean, stand up and tell

it.

Hon. M.

de Jong: You don't like them.

MacPhail: What I don't like are the horrendous implications for working

people in this province that are going to occur because of this government's

legislation, without any answers about what's going to happen to their future.

That's what I don't like. That's exactly what I don't like.

In fact,

that was the kind of discussion the minister did have with the IWA for the last

year and a half. He delivered nothing for them — absolutely nothing. I have no

idea what he's talking about, going up and down the Island — about mills shut

down. They've shut down under his jurisdiction. We don't have a resolution to

the softwood lumber dispute and nothing in sight. I feel just as badly that his

government caused the closure of those mills as anyone.

This

legislation is only going to exacerbate this problem unless the minister can

tell British Columbians the benefit they get out of this legislation. That's all

I'm asking — not the benefit to the forest companies and their bottom line,

but the benefit for the working people and the communities.

Now, the

effect of the repeal of

section 71 is that there will no longer be a loss of

tenure when the mill closes. The company gets to keep the timber. It doesn't

have to have any requirement to process the logs or to maintain or create

employment. That's what the repeal of

section 71 of the Forest Act means.

So now that

the companies no longer face a loss of annual allowable cut due to a mill

closure, how many mills does the minister anticipate will close?

[1635]

The

Chair: I think the committee will recess for a very short time — maybe

three minutes. Thank you.

The

committee recessed from 4:37 p.m. to 4:46 p.m.

[H.

Long in the chair.]

Hon. M.

de Jong: Returning, then, to the member's question. The best information

that I have been provided around the question as it relates to processing

facilities — and that's what we seem to be focused on here for the moment —

relates to the information set out in the Pearse report and the overcapacity

issues and the antiquated processing facility issue that he identified.

The

challenge, of course, is how to attract the requisite levels of reinvestment

necessary to change that fact — to replace some of those facilities. Some of

them were built, based on my review and information, to service a timber profile

that has changed appreciably. Some of them, by virtue of the land use decisions

that have been made over the years and particularly the last few years, are

perhaps in areas where they shouldn't be any longer. Those are the kinds of

decisions that have to be made.

I will

confess that I am of the view that government is not the agency that should make

them or attempt to dictate the making of those decisions — that there are

others involved in this industry who are better equipped to know where a venture

stands the best chance of succeeding and have better knowledge of the timber

profile and the type of facility that would best utilize that timber profile.

MacPhail: Well, I'm curious that it's the Pearse report the minister is

relying upon. I recall in days past that the Ministry of Forests knew quite well

what the effect of changes was going to be and that they could actually provide

that evidence on a facility-by-facility basis. I also know that the minister has

been having meetings with industry to discuss this legislation. Has there been

no discussion, or what discussions has he had about changes in facilities?

Hon. M.

de Jong: Well, the member is right. I've had extensive discussions around

the province with harvesters, stakeholders, communities, first nations and

members of the processing community, large and small. I have to tell her that no

one has said to me that as a result of what you are talking about, we are

expecting to shut down facility X, Y or Z. I've had in the last month — and

I've referred the member to this — a number of operators on the processing

side tell me about either their plans or the concrete steps that are

[ Page 6631 ]

underway to expand their facilities, whether it's in Prince George or

elsewhere around the province.

[1650]

One should

be, I think, responsible in assessing what is driving some of that activity. In

the Prince George area, as well, we've got a proliferation of beetle wood that

is also impacting on decisions that businesses make in the harvesting sector —

whether it's Brink or Cheslatta, — though anecdotally, that is the information

I am getting.

But the

member already raised the lingering unresolved softwood lumber dispute. There's

certainly, with respect to that single issue even, a degree of uncertainty out

there, and we haven't even talked about lumber prices, which are at

exceptionally low levels right now.

MacPhail: I'm actually not referring to the minister travelling around the

province. He had a committee of business people from the industry that he was

working with about this legislation. There was a committee he had that was going

to reduce costs. The labour people were partially involved in that. There was a

committee, because he was accused of working behind closed doors and not

including the broad spectrum of people who would be affected by this

legislation. They were industry people.

So is the

minister telling me that he has no idea, except travelling around the province

and hearing anecdotes, about the effect of this legislation?

Hon. M.

de Jong: I don't know what committee the member is talking about. With

respect to coastal restructuring, I think it's pretty widely known we had a

group that extended far beyond licensees and far beyond major licensees that we

spoke with — contractors, labour. We certainly had plenty of discussions

dating back some time to a whole host of issues — some of them reflected here,

others not.

MacPhail: Yes, that's exactly what I'm referring to, and it was done behind

closed doors. They weren't public meetings; it was done behind closed doors.

Is the

minister saying he has no studies on anything about the effects of this

legislation? Why is he doing it, then? If he doesn't have any studies to prove

one way or the other, why do we have this legislation?

Hon. M.

de Jong: First of all, the committee the member is referring to was not a

government committee. It was a committee struck by the participants in this

industry on the coast, who — you know what? — came to the conclusion on

their own that they have a cost problem on the coast and that unless they

address that cost problem, it really won't matter what government does, because

there ain't going to be an industry here.

I applaud

them. I applauded them then and I applaud them now for having the foresight to

sit down and get together — a lot of historical differences, a lot of baggage

there when you put all those people in the room. But they sat down, and they're

trying to work through that. They invited government to be a part of it, and I

was happy to do so. So if that is a process that somehow offends the member,

well, I'm sorry about that.

MacPhail: The minister produced the studies that show the reason why we're

moving in this direction and the problems in the past. There has to be some

basis for this change — some statistical basis, some forecast basis. Or else

why are we here?

Hon. M.

de Jong: What is it about a comprehensive study like that produced by Dr.

Pearse that the member is so suspicious of? Why are we doing this? Have you

looked at the numbers? Have you looked at the impact a decade of decline has had

on the industry? Have you gone to some of these towns? The structure this member

valiantly tries to defend failed those towns miserably.

[1655]

Why are we

here? We're here because British Columbia's number one industry, upon which

virtually every community in this province depends, is in big trouble. We'd like

to create a structure within which that industry can prosper again. Yes, that is

a different approach than a previous government which said: "Well, we're

going to fix it, and here's how. We're going to do this, this, this and this,

and we're going to direct and dictate that X number of thousands of jobs are

created. And, by God, that will happen, just because we said it will."

Yeah,

that's a different strategy. You know what? It's probably a tougher strategy.

It's a heck of a lot easier to go out and make the political announcement of the

decade or the century and say, "This is the proudest day of my life"

— as I think the Premier of the day said — "because we're creating

thousands of jobs," and then stand back and watch as the thing just goes

from bad to worse and refuse to at least consider that perhaps, in a changed

world, we have some structural impediments to improving our competitiveness.

That's why

we're doing it. Though it might not be the easiest way to respond — it might

be easier to hide behind worldwide events and blame others — we think it's

time we got on with allowing people involved in forestry to do what they need to

do, whether they're contractors, workers, communities or licensees — allowing

them to get on with developing in a way that will better equip them to compete

on a worldwide basis.

I know this

won't be the last time I do it, but in the spirit of being completely forthright

with the opposition leader…. Do I see a day ten years from now where there are

companies in British Columbia that simply own timber and don't have a single

mill? Yes, absolutely. They'll own the rights to that fibre on a Crown-owned

land base. You know what they'll do? They'll harvest it and they'll sell it.

I've got

another prediction: I bet they'll sell it to the highest bidder. And I've got

another prediction: I bet

[ Page 6632 ]

they'll sell it to the highest bidder, and the highest bidder will be the

person that can maximize the value out of that timber. You know, I think that's

a good thing. I think it is a far better thing than watching a particular

dynamic continue that shows no hope whatsoever for all of those communities

which are dependent on forestry in our province.

MacPhail: I can understand why the minister wants to revert to bombast

rather than study. Is he suggesting that this legislation arises out of the

Pearse report and nothing else?

Hon. M.

de Jong: No.

MacPhail: Well, I asked for studies. He said: "Does the member not

think the Pearse report is a good study?" What studies is this legislation

based on besides the Pearse report? And what projections have been done as a

result of these changes based on the studies the minister has done?

Hon. M.

de Jong: Well, look, confronted by a situation that could only be described

as very, very poor in the forest sector in 1991, we commissioned someone that I

think enjoys a great deal of respect around British Columbia and beyond our

borders to conduct a diagnosis, with no preconceived notions.

MacPhail: Who?

Hon. M.

de Jong: Dr. Pearse.

MacPhail: Oh. You said 1991.

[1700]

Hon. M.

de Jong: I'm sorry. The member is correct — 2001. Dr. Pearse, who

conducted that diagnosis, laid out his findings and some ideas about what was

contributing to those negative trend lines and what needed to happen if those

trend lines were going to be reversed.

We've taken

that information. The legislation doesn't reflect every facet. In fact, as a

result of all of the discussions that took place following the publication of

Dr. Pearse's report, some of these provisions — not necessarily the

section

we're dealing with here but other features of the revitalization package —

were changed and influenced by others who brought their information and their

ideas.

Now, if

there are features to the material presented by Dr. Pearse or if the member

believes that that comprehensive report overlooked aspects of the industry…. I

presume she doesn't agree with many of his findings — and that's one thing —

but if the allegation is that he has neglected, in his diagnosis, key parts of

the equation, then I am interested to hear that from the member.

[J.

Weisbeck in the chair.]

MacPhail: Look, if the minister doesn't have any other studies, just say so.

What is he saying about whether I agree with the Pearse study or not, and

accusing me if I don't? I'm asking him what studies he based these changes on. I

said: "Is it the Pearse study only?" He said no. If he doesn't have

anything else, just stand up and say so. Don't try to turn it on me.

Dr. Pearse

predicted the closure of 17 mills. What does the minister say about that? What

are those mills? Well, Mr. Chair, I don't think the minister has any studies

other than Dr. Pearse's. Fair enough. We can work with the Pearse study. And

he'll have to reverse what he just said. He said that it wasn't just Dr.

Pearse's study; he had others. He doesn't.

So let's

deal with the 17 mills that Dr. Pearse says will close. Where are they?

Hon. M.

de Jong: Well, let's begin by being accurate, and we can read back or not.

The member

said: "Is legislation based exclusively on Dr. Pearse's report?" I

said: "No, it's not." I don't know what part of this the member is

having difficulty with.

commissioned a formal study by an eminent forest economist, Dr. Pearse. We got

submissions. Do you want to call them studies? I guess you could. We got

submissions from labour, we got submissions from licensees, and we got

submissions from contractors. Are submissions studies? Call them what you want.

And we talked to people about those studies. Then we had more discussions within

the caucus, and we had discussions within the cabinet. We went back out and had

more discussions with people based on their submissions, studies or whatever you

want to call them, and we came up with a product. Some people like it; some

people don't.

There it

is. I don't know what problem the member is having with the evolution of a

legislative initiative that is before us now.

MacPhail: What 17 mills will close?

Hon. M.

de Jong: Well, the member will recall from her reading of the report that

Dr. Pearse's calculation was based on an analysis of capacity versus AAC.

MacPhail: What mills will close?

[1705]

Hon. M.

de Jong: It speaks volumes about how the previous administration conducted

itself, and we've been down this path before. The member asks: "What mills

does the government say will close? What mills does the government say will

reinvest? What mills does the government say will rehire?" Well, you know

what? I don't sit in the corporate boardrooms. I know the member has difficulty

accepting that, but it's true.

As the

industry as a whole prospers, decisions will be made. What the member can't wrap

her mind around is a pretty basic finding that there is overcapacity and that

our forest sector has to deal with that. I suppose, if she or her government had

ever had the courage to acknowledge that fact, their response would

[ Page 6633 ]

have been to say: "You can close this one; you can't close this one. We

have decided that you will renovate this one and you will upgrade that

one." I suppose that's what they would have done. I'm not.

MacPhail: Does the minister have any idea what mills will close?

Hon. M.

de Jong: The member should drive up the highway, and she'll see some mills

sitting idle.

MacPhail: I'm not sure why the minister has to show such disrespect to the

people who work in this province — such disrespect — but that's what he's

doing right now. These are legitimate questions. They're based on the answers

that he is giving me and referring me to. The Pearse report predicted the

closure of 17 mills. Has the minister followed up on that prediction, then?

Hon. M.

de Jong: Yes.

MacPhail: And what mills will close — or not? Will there be zero closures?

Is the minister suggesting there will be zero closures now with these changes?

Hon. M.

de Jong: I think you'd have to be pretty foolish or pretty arrogant to

attempt to provide guarantees to an industry that is facing some pretty serious

restructuring challenges.

MacPhail: I actually might have thought that that was the work of government

caucus MLAs, at least, if the minister is basing this legislation, as he says,

on submissions from his own caucus. Perhaps they would know what mills are

anticipated to be closed. Does this government do socioeconomic studies on the

impact of its legislation?

Hon. M.

de Jong: We know there is excess capacity, particularly on the coast. What I

am hearing is a demand from this member that the government direct how that

excess capacity is going to be dealt with. If I haven't been clear in the past,

let me be clear now: we are not going to exercise that direction.

[1710]

MacPhail: God, I'm asking questions, and he's saying that I want him to

direct. I'm asking whether he's got information. These are real people, real

communities that are going to be affected by this legislation. I'm not asking

the government to do anything except provide me the information about the

effects of the legislation. Does the government do socioeconomic impact studies

on its legislation? Here's why I'm asking the question, Mr. Chair. This

government's booked $75 million in compensation for displaced workers. Did he

make that figure up?

I am asking

questions based on what the minister himself has reported. I'm not directing him

to do anything, or the industry. The government has booked $75 million in

compensation for displaced workers. Did it make that figure up?

Hon. M.

de Jong: As I have said in this House before, the calculation of that figure

takes a number of things into account — discussions with labour, particularly

the IWA; the contract logger community — and is influenced, as well, by the

government's ability to pay.

MacPhail: How about a heartlands strategy? Does a heartlands strategy

involve socioeconomic impacts by legislation introduced?

Hon. M.

de Jong: Whenever one is confronted by the kind of situation that we have

— and again, I'm directing most of my comments with respect to the coastal

situation — there is frustration. We have on the coast, perhaps, an operator

with multiple processing facilities. We know there is overcapacity. No one likes

that. That operator has to deal with that, because if they don't, at the end of

the day they're not going to be operating.

[1715]

Now, I

think the member is asking me if I am privy to information about how that

particular hypothetical operator might respond — which of their multiple

processing facilities they may downsize or even shut down. No, I'm not. Those

are decisions that have been imposed on us, on the forest sector, by virtue of

what has taken place — antiquated processing, antiquated processing sector,

changes in the availability of tenure.

I'll try to

be clear to the member. In a situation where a licensee has decisions to make

about multiple processing facilities, have I got some piece of paper, or have I

got some insight into the decisions that operator is going to make? No, I don't,

and that's the fact of the matter.

MacPhail: Did the minister, in arriving at the figure of $75 million,

consult with the CEP or the PPWC?

Hon. M.

de Jong: I think it's fair to say that most, if not all, of the discussions

on the labour side would have been with the IWA, and that is as a result of the

belief that to the extent there are impacts here, it will likely be in the

primary processing side and on the harvesting side.

MacPhail: In fact, we will get to the effect that this is going to have on

the pulp side.

The reason

why I asked about socioeconomic studies as part of the heartlands strategy is

because small business people have talked with me about the effects happening to

their businesses in communities already affected by restructuring in the

industry. So was there any analysis done about the community impact — the

economic impact on a community or a region basis?

Hon. M.

de Jong: The member will know that we have had in the past, and continue to

solicit, contribu-

[ Page 6634 ]

tions from the federal government. We have allocated some funding at the

provincial level to address transitional challenges associated with this

restructuring and revitalization.

[1720]

Again I say

to the member that if the question is: whether we — the Forest Service, the

government — have conducted a specific study with respect to a specific

community, the answer is no, in large measure because I cannot tell the member

today, nor could I tell her a month ago, nor likely a month from now, what the

decisions may be to deal with an overcapacity issue. Nor could I tell her until

it happened a couple of months ago that the facility in Campbell River was going

to receive a multimillion-dollar upgrade and expansion. That was a decision that

that operator in Campbell River made, and they didn't check with me first.

MacPhail: Gosh, it's interesting how the minister commits to spending $75

million, and he has nothing to base it on — nothing, by the way. He can't give

me any evidence of any studies he's done to suggest about displaced workers —

nothing.

By the way,

the CEP who are watching — I don't blame them; their future's here — have a

sawmill in Campbell River. PPWC has a sawmill in Mackenzie, a plywood plant in

Prince George and two sawmills on the Island. Those working men and women will

be directly affected by all of this, unless the minister is somehow suggesting

the mills represented by those two unions won't be affected by this legislation.

The

minister is going to keep the annual allowable cut available without any

requirement now to process that fibre in British Columbia. We've spent the last

three and a half hours, and he's saying exactly that. What impact is that going

to have on log exports?

Hon. M.

de Jong: Unless a government changed the rules around log exports, none.

MacPhail: Well, the Skeena Cellulose man who got the fibre from up there,

the man who…. I'm sorry. I think his name is Mr. Venies, but I always say it

wrong, so I apologize for the pronunciation of it. He has a mill. He's got logs.

He's exporting them all. They're not producing anything. He's not creating one

job in a mill with that kind of timber, because this government changed the

rules to allow him to do that.

Now, there

are going to be fewer mills. Or maybe Dr. Pearse is wrong, but Dr. Pearse says

there are going to be fewer mills. There are going to be at least the same if

not an increasing amount of timber available. Isn't this government creating a

situation whereby there will be an ever-increasing amount of timber surplus to

B.C.'s needs, which is the basis on which raw log exports are permitted?

Hon. M.

de Jong: I may have missed something in the

preamble to the question. I'm

sure the member will fill me in, in a moment. On the coast in B.C. we don't cut

our AAC now. Part of the objective here is to create a circumstance in which we

can actually harvest and process closer to our actual allowable annual cut.

MacPhail: Yes, but if the cutting stays even as it is now or the cut

increases — not the annual allowable cut but the actual cut — and there are

fewer mills, is that not creating a situation where there are logs, timber

surplus to B.C.'s needs, and therefore the government creates the situation of

allowing raw log exports?

[1725]

Hon. M.

de Jong: I don't know if this helps the member, but it does seem to me to go

to the point that we are discussing now. I am now reading from Dr. Pearse's

report at page 20, where he says: "Today it would take nearly 30 million

cubic metres of logs per year to fully utilize the existing mill capacity,

compared to the present available timber supply of 24 million and actual

harvest” — as the member pointed out — "considerably less."

Then he

goes on to talk about the competitiveness issues and the efficiency issues that

go with improving that consumption rate. This is where we get into the

discussion around a mill — admittedly, a single mill — operating, instead of

on a one-shift basis, on a two- or three-shift basis and the requisite

efficiencies that go with that, the increased volume of timber that flows

through it and the reduced per-unit costs that result from it.

MacPhail: That's all very well and good if it works out that way, but so far

the industry is extremely reluctant to invest in this province — extremely

reluctant. In fact, forest sector investment is on the decline in this province,

but once again we leave it up to the industry to decide the future of all of

this.

I just want

to point out what I picked up at my break, which was that Bill 44…. My staff

have been looking at Bills 44 and 45, and they directly impact on what we're

discussing right here. We're going to have to do this all over again, because

just looking at the first couple of sections of Bills 44 and 45, I note that

this bill repeals those things that must be in a licence. Bill 45 repeals those

things that a minister must consider in awarding a licence. You can't talk about

one without the other.

That's Bill

45 and Bill 44, and don't blame me for having to redo all this work. The

government introduces legislation on a Thursday, the very day and time we're

debating the committee stage of an extremely important piece of legislation, and

we're going to have to do it all over again.

Lekstrom: Just a couple of questions and comments to the minister on this,

fully recognizing that change in our forest industry was needed. I think that's

fair to say when you look at what's taken place.

To the

minister, I'll ask the question.