1989 Legislative Session: 3rd Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MAY 12, 1989

Morning Sitting

[ Page

6745 ]

CONTENTS

Routine Proceedings

Private Members' Statements

Forestry. Mr. Miller –– 6745

Hon. J. Jansen

Motorcycle awareness. Mr. Rogers –– 6747

Mr. Lovick

Hon. Mr. Richmond

Youth. Mr. Barnes –– 6749

Hon. S. Hagen

Horse-racing. Mrs. Gran –– 6751

Mr. Rose

Hon. Mr. Ree

Committee of Supply: Ministry of Transportation and Highways estimates.

(Hon. Mr. Vant)

On vote 72: minister's office –– 6753

Mr. Lovick

The House met at 10:05 a.m.

Prayers.

HON. MR. REID :

It's with a great deal of pleasure that I introduce to the House today

a Rotary International group of businessmen and professionals from

Kanpur, India, hosted by the Rotary Club of Vancouver Chinatown. They

are in a study exchange which promotes goodwill and understanding

between countries. With them are Ed Kisling and Terry McLeod of the

Vancouver Chinatown Rotary Club. These gentlemen from India have toured

the entire province and met with their counterparts in professions in

British Columbia. Most of the members of this House are in one way or

another associated with Rotaries, so we do understand the challenges

and dedication of the Rotary and its members, and offer a special

recognition of these Rotarians today.

With the group is

Rotarian Ravindra Khanna, Dr. Sunil Tanaja, Dr. George Antony Chunkath,

Ashok Kant, N.K. Bhattacharya and Rajeev Sexena. My apologies if I have

mispronounced the names — we do respect these gentlemen — but they are

tough. I wish I had my colleague the member for Esquimalt-Port Renfrew

(Mr. Sihota) to help me with the names. In any event, Mr. Speaker,

would the House make these gentlemen, along with the Rotary Club,

especially welcome here today.

MR. BLENCOE : I have

the great honour to bring to the attention of the House an event that

is happening off the Victoria waterfront this morning aboard HMCS Huron :

a special memorial service for a distinguished Canadian and a resident

of Victoria, Lt.-Cdr. Ted Simmons. Lieutenant-Commander Simmons

received one of our highest military honours, the Distinguished Service

Cross, for his heroic action at sea when he and his crew boarded a

sinking U-boat to capture secret intelligence data. Lieutenant

Commander Simmons also received the Distinguished Service Order, an

honour awarded for his extreme bravery in a sea battle in the

Mediterranean. His bravery was portrayed in a motion picture called Corvette K225 .

Lieutenant-Commander

Simmons received a number of other awards for bravery and indeed has

been portrayed as a genuine Canadian hero. Would the House please join

me in sending our condolences and our thanks to his family, in

particular his wife, Ruth Simmons.

MRS. BOONE : It's not very often that I have the honour of introducing

a class of students, as not very many of them actually make it down here. I'm

very happy today to introduce to the House a class of students from Blackburn

School in Prince George, and their teacher Mr. Dave Harrison. Would the House

please join me in welcoming them.

Orders of the Day

Private Members' Statements

FORESTRY

MR. MILLER :

Mr. Speaker, I appreciate my colleague moving to last place to allow me

to catch an airplane back to my constituency in about half an hour.

wanted to talk this morning about forestry. It's fitting, because this

week is National Forest Week in Canada. It would have been fitting had

that been recognized in a higher fashion in this Legislature at the

outset of the week. Nonetheless, we all recognize the importance of

forestry to the economy of our country and our province.

The

value to Canada of forest products that we export to the four corners

of the world is about $22 billion. The value for British Columbia is

approaching $10 billion. In terms of the economic value of the

industry, we can see that it is indeed critical to our economy.

terms of jobs — and we're just talking about direct jobs now — in

Canada there are almost a quarter of a million jobs and about 75,000

direct jobs in British Columbia. Normally, with a multiplier of 1.8 or

2, we're looking at a considerable increase in that. You can't really

emphasize enough the importance of forestry to the Canadian economy,

and to the British Columbia economy in particular.

It's

very timely, given that importance, that we do reflect on the state of

the industry. I'm going to talk about British Columbia this morning. We

have a serious problem in terms of the sustained yield in British

Columbia. It became clear to many of us this year when Fletcher

Challenge announced cutbacks in its annual cut on Vancouver Island, in

tree-farm licence 46, that we indeed have some serious problems in

terms of the amount of wood available for harvesting and that required

to feed our processing plants and maintain that economy and those jobs

in British Columbia.

With the Fletcher Challenge cutbacks,

we have seen a reduction in jobs — perhaps up to 800 direct jobs.

Again, using a multiplier, we're looking at in excess of 1,500 jobs. We

note some cutbacks in the northern end of the Island, another 100-or-so

jobs, as a result of rationalization of the amount of timber available

to harvest.

So in the last short while, we have seen

probably about 2,000 jobs disappear in forestry on Vancouver Island. We

see the objective information provided by the Reid Collins study about

the imbalance between the amount of timber available and the

requirements of our processing facilities. It's estimated that the

sustained yield on coastal British Columbia is in the order of 26

million cubic metres per year. It is also estimated that the

requirements of industry to feed those processing plants in 1989 are

forecast to be about 36 million cubic metres per year. There is an

imbalance of 10 million cubic metres per year, in

[ Page 6746 ]

terms of the fibre requirement for our coastal processing facilities.

won't go into statistics on all the timber supply areas, but it's clear

that we have not been following a policy of sustained yield; we have

been following a policy of depletion of the old growth. And built into

that policy are fall downs, gaps between the time the second-growth

timber will be available and the volume of that second-growth timber to

feed our processing plants.

There will be serious problems

in terms of employment in the forest industry as a result of this very

poor planning. As Professor Pearse has stated, despite the rhetoric of

the Sloan commission in 1945 and '46, we have not really been following

a sustained-yield policy. It's with some amazement that I listen to the

response of the Minister of Forests (Hon. Mr. Parker) on that important

question, in terms of employment and the economy of British Columbia.

When confronted with the evidence of over cutting and poor planning,

the minister said: "The problem isn't that we have not enough timber.

That's not the problem we face in British Columbia. The problem we face

is we have too many processing plants." That's the Minister of Forests'

rather simplistic analysis of the major difficulties we are facing:

it's not that we don't have enough timber; we have too many processing

plants. I suppose the minister, then, is in favour of shutting down

some processing plants, of creating unemployment. That in itself is

shocking.

When we look at where we have to go in terms of

developing this industry, in terms of maintaining and actually

increasing employment in this industry, it's equally shocking that we

can see that we will not get the second reforestation agreement that we

require for this province from the federal government.

is disappointing in the extreme when we see the Premier wholly embrace

that federal budget which will have such a negative impact on this

province. It's a major disappointment.

[10:15]

1 see that although ministers on the government side are reluctant

to criticize the Wilson budget, the Minister of Finance (Hon. Mr.

Couvelier) crept into my riding, unbeknownst to me, and the Daily News captured some of his words. It is heartening to know that the Minister of Finance said to the Daily News ....

MR. SPEAKER : I regret to inform the member that his time is up under standing orders.

MR. MILLER : Thank you, Mr. Speaker. I'll get to it on rebuttal.

HON. J. JANSEN :

My comments will be brief and perhaps more succinct in terms of talking

about the opportunities of the forest industry in British Columbia.

the member opposite indicated, forestry has a significant impact on the

economy of the province We are very pleased to see that this week has

been declared National Forest Week. The theme this year, of course, is

that your forests are your responsibility

The events

happening throughout the province in over 100 communities reflect the

importance of forestry to our province and the profile that it is

receiving. We, as you know, are looking very closely at identifying new

markets for our forestry. In fact, through the new B.C. Trade

Development Corporation, one of its sectors will be to examine and

assist the forest industry in identifying markets and working with them

to identify new product opportunities. I have had occasion to visit

some of the operations in the province, and the initiative that these

operators have in developing new products is indeed heartening to see.

Sustained

yield is something we are looking at in a number of areas. I was

surprised the member for Prince Rupert didn't talk about the problem

we're finding with groups that are not enabling harvesting of our

forests in a planned way. We don't see the multi-use of our forests

that we'd like to see, and I'm surprised that the member has not spoken

about that and talked about the frustrations that we have in

determining our harvests in a planned way.

The member also

did not talk about the significant silviculture program that we have

undertaken. In fact, we have increased our planting to over 200 million

seedlings annually, and we are looking at increasing that to over 300

million seedlings per year. In fact, we have planted the two billionth

seedling since reforestation began in the province in 1924, and we hope

to be planting the three billionth — and we've counted them all — in

three years. That's a significant opportunity and really shows the

commitment we have in forestry.

Indeed, in my own community

we have many people working in the forest sector, and we have tried to

make sure that the public is aware of the opportunities in forestry. We

have organized — and I'm not sure whether the member for Prince Rupert

has taken that same initiative — tours through the forests so that

people understand when we talk about thinning, harvesting, planned

management, weeding and brushing. That has received a lot of interest

in the community. Unless the public is aware of the opportunities of

the forest and understand how well the forest is being managed, they

don't understand when we talk about sustained yields.

colleague the Minister of Forests is not here today. I wanted to have

the opportunity to at least briefly address some of the points that the

member opposite raised. I'd like to emphasize that our commitment to

forestry is as strong as ever. We are working very closely with the

forest sector to enhance our export opportunities and to further

develop the value-added sector of our forestry community, where we see

a significant opportunity for the future.

MR. MILLER :

I recommend that the member take a walk in the woods. You should take a

walk in the woods, and you will see the problems we have in this

province. The Minister of Finance obviously understood the

ramifications of the federal budget because, quoting from the Prince

Rupert Daily News , he

[ Page

6747 ]

said.... But he did admit he was worried the

federal government might not help fund a second $700 million forest

resource development agreement with B.C.

That's the first

admission we've had that there has been any concern in the cabinet

benches about the lack of this vital reforestation program. I admit

there has been a vast improvement in reforestation and silviculture.

We're making up for more than a decade of neglect by the Crown. We have

500,000 hectares of NSR land in this province which this government is

responsible for creating.

Interjections.

MR. MILLER :

It's fine. I talked to the minister about his bill and finding new

markets. But, Mr. Minister, I've got to re-emphasize that we have

neglected our forest land base. We are overharvesting; there will be

severe falldowns, and there will not be the fibre available to feed the

industry that exists in British Columbia now. There will be

unemployment created as a result of that.

The Minister of

Forests introduced a conversion policy in this House last year. Again

the Minister of Finance, who is a bit of a forest critic on the sly,

quietly said he didn't agree with it. There seems to be some division

or argument between the Premier and the Minister of Forests with regard

to the need for a royal commission in this province.

attended those sessions out there in British Columbia, and people came

out in the thousands. They wrote letters and said: "We need a royal

commission in British Columbia. We've got to identify those very

serious issues, and we've got to have a plan to deal with them." This

government's reluctance to move is really being taken into account by

all those people out there who have this concern about the forest

industry.

Mr. Speaker, I would suggest that the best

present this government could give the people of British Columbia to

conclude National Forest Week would be to call a royal commission on

forestry in British Columbia.

MOTORCYCLE AWARENESS

MR. ROGERS :

I was going to speak on motorcycle awareness, and then my arm was

severely twisted by the member for Mackenzie (Mr. Long), who wanted me

to discuss the gas pipeline, because it's fully seven days since we

heard about it. But I won't do that.

I hope this is a genuinely non-partisan issue, which I believe all members

of the House will want to think seriously about. I'd like to congratulate

the government on its proclamation of May as Motorcycle Awareness Month, because

this is the season of the year when many people who have a fondness for the

two-wheeled machine take it out of the garage, dust it off, or else go out and

buy a new one, and hit the road and enjoy it.

Last

weekend a number of the members of the House were invited by the

British Columbia Coalition of Motorcyclists to go on a ride, to

experience firsthand what it's like to have a motorcycle. I was

delighted to be one of the people chosen. They lent me a brand-new,

very powerful Harley-Davidson motorcycle, which I got a big kick out

of. Unfortunately, I returned it on Monday. The member for Alberni (Mr.

G. Janssen), who distinguishes himself very well on a motorcycle, came

with his own machine and put me to shame in terms of his performance of

the vehicle. But between the two of us, the motorcycle coalition was

aware that members on both sides of this House share a concern with the

fact that the general motoring public isn't aware of the ability of

motorcyclists to navigate or move their machine the way someone in an

automobile might be able to do.

Driving home from this

event on my motorcycle, I found to my horror, on several occasions

through the city of Vancouver, that I was cut off by people who would

never have cut me off if I was driving a four-wheeled vehicle; there's

just no way. But they didn't mind at all.

I was delighted

that our caucus chairman, who was also invited to come on this event,

came. The caucus chairman arrived in style on a BMW, but with the class

and panache that she has been known for, left on a hog. And it was

appropriate.

MR. LOVICK : Black leather?

MR. ROGERS :

No, it was full white leathers. I just want everybody to be aware of

that. I'm not even going to discuss the colour of her corsage; it would

probably be out of order.

One of the reasons they had this

particular ride was to raise awareness, and that's the reason I'm

taking this opportunity here today. There are a substantial number of

motorcyclists injured every year, and in many cases they are not able

to ride a motorcycle again. In fact, in some cases they are injured so

severely that they're not able to work or even walk again. In many

cases, it's because they've been hit by another vehicle, the drivers

being unaware of the maneuverability and even the presence of a

motorcycle.

Motorcyclists are an interesting group of

people. They cover a pretty broad cross-section of society and a total

spectrum of age groups. As a societal group they do some interesting

things. They have two or three so-called rides a year where they try to

raise money for their own awareness, but the rest of the time, on a

very frequent basis, they raise money for worthy charities. Probably

the most widely known charity ride is the Christmas toy run, when every

motorcyclist brings a gift for a needy child. I think it's fair to say

that every weekend of the year, somewhere in this province,

motorcyclists — who by the very fact that they just love their vehicle

and love being associated with it — get involved in raising money for

worthy causes and needy people.

[ Page 6748 ]

Mr.

Speaker, it seems to me that a private member's statement is the

correct opportunity to discuss this issue, and I'm delighted to inform

the House that the British Columbia Coalition of Motorcyclists, with my

persuasion and also that of the member for Alberni, is arranging to

bring to this Legislature next month enough motorcycles to take every

sitting member for a ride at lunchtime. Even the members of that estate

that doesn't exist are going to be invited to go, so that you may all

experience the thrill and excitement of catching a yellow jacket in

your face at 30 miles an hour, as you go around Beacon Hill Park or

wherever. Perhaps for some of them we'll arrange a Malahat trip and for

others something a little more local.

So you've been warned

in advance. I believe this is a non-partisan issue, but I also believe

the opposition House Leader, who of course drives a quieter and more

sedate motorcycle than the kind I normally try to get my hands on,

wishes to respond. After that, Mr. Speaker, I'll see if there's

anything I wish to add.

MR. LOVICK : I have the

pleasure of responding on behalf of my colleague the member for Alberni

(Mr. G. Janssen), rather than our House Leader — just to clarify that,

if I may.

I agree with the member for Vancouver South that

this is a genuinely non-partisan issue. I think we're all very happy at

the good work done by the B.C. Coalition of Motorcyclists, in terms of

their efforts to make us aware. It is a very large organization. There

are some facts about what motorcycling means in this province that I

have a hunch most people are unaware of. There are some 153,000 class 6

licence-holders in the province, and according to the most recent

statistics — in May of this year — some 67,000 motorcycles were

registered. We're obviously talking about a large and thriving

organization.

As I said a moment ago, the B.C. Coalition of

Motorcyclists deserves credit, and we should show our appreciation to

them for the work they've done in trying to make us aware that riding a

bike is obviously somewhat different than driving a car. I haven't

ridden a Harley or anything like that, although I would have loved to.

My experience is restricted to riding bush-bikes when I worked for the

B.C. Forest Service, a little different kind of experience.

[10:30]

If I may, my colleague from Alberni has asked me to make a couple of

points and register some concerns. First, I think all of us in the

House are being asked to take into consideration that insurance

premiums have apparently continued to increase very significantly. I

gather they've doubled in the past ten years, despite the fact that

some 85 percent of accidents are actually caused by car drivers. I

notice that the Solicitor-General (Hon. Mr. Ree) is listening, which

I'm pleased to see. Another concern is whether the licensing

arrangements are as tight as they should be. I understand, for example,

that a first-time motorcycle driver — a kid 15 or 16 years old, in

effect — can buy a 145-horsepower bike without having to have a licence

and can in fact take it away. In the industry those bikes are known by

some rather interesting terms, suggesting they go very, very quickly

and can blow you out of the seat. One perhaps wants to be a little

careful about that.

The other concerns are to do with

safety. The member for Vancouver South certainly touched on some. Most

of us are familiar with the helmet controversy. A fairly major study

was undertaken by the B.C. motorcyclists' association and a national

group, and that was submitted to government. They're looking to see

whether some action will be taken on that. Other matters of hazards,

road conditions and so forth are obviously to be brought to our

attention, and also some other provisions besides helmets in terms of

safety. For example, you see people riding the new trendy kinds of

bikes that don't look very threatening, wearing shirts and sandals and

virtually no clothes — the members opposite have suddenly perked up —

and obviously not protected if they get into any sort of misfortune.

on this side of the House are certainly happy to provide our support

and endorsement to the campaign for increased motorcycle awareness. I'm

pleased to do so.

HON. MR. RICHMOND : I thank the

second member for Vancouver South (Mr. Rogers) for allowing me just a

moment to add my words about motorcycle awareness. I think the key word

here is awareness. Those of us who have ridden motorcycles for many

years know that the primary cause of motorcycle accidents is motorists

turning left in front of a motorcyclist or pulling out of an

intersection turning right. They tend not to see motorcyclists — or

cyclists, for that matter. I happen to ride a bicycle a fair amount,

too, and it's even worse because you don't have the power to get away.

I would just urge motorists, when they see that headlight coming down

the road, not to turn left in front of it or pull out in front of it;

there is a human being on it.

A lot of responsibility lies

with the motorcyclist too. The member for Nanaimo mentioned the

rockets, as they're called; a lot of responsibility must go with a

machine of that kind of power. I urge young people especially, who tend

to get into problems on these machines, to stop and think for a moment.

You don't have to go 100 miles an hour to enjoy yourself on a

motorcycle. You can get a lot of pleasure out of it in the bush, as the

member says, or riding at the speed limit down the highway.

Some

of us own more than one motorcycle and have difficulty explaining that

at home, but we enjoy all different kinds of riding. The member for

Vancouver South did mention that it covers a broad spectrum of people,

all the way from Malcolm Forbes to people like us who cannot afford to

own 85 motorcycles.

I thank the House for the time, and I urge everyone to be aware, have fun and watch for loose gravel in the corners.

[ Page 6749 ]

YOUTH

MR. BARNES :

I'm very pleased to have a few moments to bring before the House some

thoughts about the young people in our community. As politicians, I'm

sure most of us have at one time or another had to address so-called

issues concerning young people: such things as the quality of life,

education, employment opportunities, socialization and their rights. As

a matter of fact, recently in the Legislature we were discussing the

right of 18-year-olds in the province to vote for the government, as is

the case throughout the rest of the country. I don't really think we

should think in terms of issues that are exclusive to young people. I

think that is a course that we as a society should begin to resist,

because really the issues of today should concern all of us regardless

of age, race, colour, religion, ethnicity or whatever. In other words,

I guess what I'm suggesting is that we're going to have to begin to see

ourselves as common inhabitants with common concerns and a greater

awareness of our interdependency, one with another.

I'm not

sure we will do that well if we continue to think in terms of youth

issues. What I want to suggest is that although the situation is pretty

bad in terms of world conditions When you consider the increased global

destruction, particularly with respect to the ozone and the effects

we're just beginning to realize are resulting from the use of CFCs in

coolants, refrigeration, spray cans, etc., and when we look at the

poverty and economic disparity in the world, social chaos and rampant

inhumanity, there are many who are cynical and would say: "What's the

point?" I think the point is that we as adults, or as the

establishment, have clearly been unable to change the tide and turn

things around, although I'm sure we've done our best.

What

I'm really saying is that this disheartening situation that the world

faces, that all of us face, should not be addressed only by the

establishment, only by those who are in power, only by those who so far

have been mandated to assume responsibility for the decisions about

tomorrow. I don't think we can any longer afford to exclude the young

people of the world from a legitimate rightful role as participants in

decisions about where we go tomorrow.

I know those

objectives and goals as far as involving the youth would almost be

revolutionary in our society. It simply is not the case.... Young

people are not directly involved in the decision-making process in our

society at any stage. Young people have been led to believe that they

must wait their turn. No matter how well educated, how informed, how

enlightened, how anxious, how truly capable of making a contribution,

they have been told to wait their turn

I think when we

consider what is happening in the world, when we look at the kinds of

atrocious acts we are perpetrating upon ourselves, when we look at

nearly a million young people dying from malnutrition, starvation and

war in the southern African countries alone, and when we look at hungry

children in this country who are having to be fed by special programs

as a result of neglect, abuse or whatever you may want to attach to it,

then we know we're in trouble.

Let's give youth a chance.

Let's take the bold step. Let's stop the youth suicides, the youth

dropouts, the alcohol and drug abuse, the prostitution of our young

people on the streets, the advantages that are being taken of them by

adults. Let's stop the neglect. Let's tell young people that not only

do we respect their capabilities to participate in the decisions of

society in a constitutional and rightful way, but we are going to

guarantee that these things can happen and must happen if there's going

to be any hope for tomorrow.

What I'm suggesting is that

the status quo has — to use a phrase from business — used up its line

of credit, and it looks as though the powers that be or the nature of

things have begun to activate some form of settlement. In other words,

the moment of truth is upon us.

I realize that

notwithstanding anything I've said, there are a number of young people

who are actively involved in the community, certainly on our university

and college campuses and in public schools. We even have an advisory

committee of young people to the government. But I'm sure that most of

us will recognize that these young people

MR. SPEAKER : I regret to inform the member that his time is up under the standing orders.

MR. BARNES : Perhaps I could conclude in my windup remarks.

HON. S. HAGEN :

As the minister responsible for youth in British Columbia, I am pleased

to take this opportunity to respond to the second member for Vancouver

Centre. I would like to say at the outset that I believe the member's

comments are sincere. He has a true concern for the young people of our

province, particularly, I think, for young people who may be less

fortunate than others.

I would like to talk about the Youth

Advisory Council that the member spoke of. As he knows — I know that he

has met with the president — the Youth Advisory Council is composed of

16 young people from the eight regions of the province. Each one of

those young people has a regional committee. We have a network of about

160 young people coming from all eight regions of the province who give

advice to me on issues confronting young people today. There is a broad

cross-section of issues.

One issue the council recently did

a comprehensive study on was substance abuse by youth in northern

regions of the province. They have now completed this study and have

submitted their findings and recommendations. In fact, they have met

with officials from the Ministries of Labour and Consumer Affairs,

Health and Social Services to review this study with them to see how

they can assist with the TRY program in helping to compile advertising

and other means of attracting youth's attention. One difficulty we have

as adults is putting out programs that youth will actually take notice

of. I

[ Page 6750 ]

am hoping that they can give some good solid advice to the ministries involved.

One

of the other things that the Youth Council has responsibility for is

the administration of the youth grants program. They have a budget of

about $500,000. They receive applications from all over British

Columbia. I believe this year they received about 100 applications.

These projects that they fund deal with peer-counselling issues; they

deal with establishing youth drop-in centres, which we have done

several of; and community-specific projects related to tourism, health,

employment or recreation.

The main focus, however, of the

grants that they have funded this year was the issue of drug and

alcohol abuse among young people. Eight projects were funded in various

places in the province. We haven't published the list yet, so I am

unable to tell you which ones they are. That will be public very soon.

February of this year the new Passport to Apprenticeship program was

announced. This is a very important program and was very well received.

It is a joint initiative between my ministry and the Ministry of

Education and provides high-school students specializing in trades

areas the opportunity to gain valuable work experience and on-the-job

training. We are trying to put more programs out there to capture more

of these young people so that they won't turn to the street or to drug

and substance abuse.

[10:45]

Another program the government funds is the Challenge '89 program,

which is both a federal and provincial program. The federal

contribution is about $19 million; ours is $10 million. The federal

government put some restrictions on this year and concentrated on

high-school students instead of university students. We left ours open

so that all students and all young people could apply. We feel this

will help approximately 6,000 young people this year to gain summer

employment.

One of the other programs that the government

announced through the Ministry of Environment recently is the Youth

Corps program, which will provide work in environment-related jobs

throughout the province to approximately 1,000 youths from the ages of

16 to 24.

The Youth Council has also published a book

called "The Next Step." Youth, like many other British Columbians, have

difficulty finding out about, remembering or acknowledging all of the

government programs that are out there to assist people. "The Next

Step" was updated in the spring of 1989 and is a comprehensive resource

guide to the public services available to British Columbia youth,

whether it is how to apply for a driver's licence, where you go for

help with health problems or anything else.

The Social

Services ministry has its Reconnect program, which deals more directly

with the concerns of the second member for Vancouver Centre. I

understand that this program has been successful. It's based on a

one-on-one experience, where street workers in the field....

MR. SPEAKER : I regret to inform the member that his time is up under the standing orders.

MR. BARNES :

I want to thank the minister for a very comprehensive review of

government initiatives to assist young people. It is certainly

encouraging in that it recognizes that the government is concerned and

is attempting to achieve some of the objectives that young people are

concerned about.

I should say that my point in raising this

decision-making process to young people. The mere fact that this long

list of programs that the government conscientiously has brought

forward was in fact laid on, brought forward, determined, decreed or

understood to be part of the solution on behalf of youth, perhaps with

some input from the youth advisory group, but primarily in a decision

by the government on behalf of the young people.... It is an established

way of addressing issues concerning young people.

I would

really like to see a shift from this traditional way of addressing

their concerns. We know that 10 percent or 20 percent and higher of

young people are unemployed constantly, and we feel that if we can

address 5 percent of those needs then we are doing pretty well. What I

want to see us do is take a look at a scheme that would bring about 100

percent employment and engagement in the life of the community —

economically, socially, politically — and also deal with some of the

problems that have become almost impossible hurdles for us to overcome

by traditional ways of addressing them; in other words, using the old

tried and true methods.

We all know that you cannot ask the

establishment to reform itself to the point where it relinquishes its

power or control. We need a joint venture. We need to have a little perestroika or glasnost ,

if you will, in the youth movement, whereby we say to young people:

"You are parties to the future. We have to take a look now at your

political rights. Your political opportunities are far too few for us

to seriously expect you to be jump-started into reality when you become

age 18. You've got to be involved all along."

This is not happening. I don't think we have the understanding....

MR. SPEAKER : I regret to inform the member his time is up under the standing orders.

MR. BARNES :

Mr. Speaker, I hope that the point I am making will be recognized,

because it is not a partisan thing I am suggesting. I am saying that we

have to pull together if we are going to deal with the year 2000.

MR. SPEAKER : The member for Surrey Guildford-Whalley seeks leave to make an introduction.

Leave granted.

[ Page 6751 ]

MS. SMALLWOOD :

I am told that 60 grade 5 students are now in the House. I always find

it unusual that 60 kids can be so quiet. They are from Lena Shaw

Elementary. With them are five adults and their teacher, Miss Kassam.

I'd like the House to make them welcome.

HORSE-RACING

MRS. GRAN :

This morning I want to spend a few minutes talking about one of my

favourite subjects: horses. In Langley a lot of women are involved in

the horse industry. In fact, it might even be said that a woman's best

friend is a good horse.

SOME HON. MEMBERS : Oh, oh!

MRS. GRAN : Well, remember, they say a man's best friend is a dog.

The

first thing I would like to do is compliment the task force initiated

by the member for Oak Bay-Gordon Head (Mr. B.R. Smith) under the

chairmanship of Mohan Jawl. I believe all of them did an excellent job,

and I want to start my little talk by reading to you one of the

statements from their findings.

"Our meetings

with the industry confirmed a widespread, almost universal concern

about the future of horse-racing in the province, particularly

thoroughbred racing. The consensus among those who work in the industry

is that it is heading for disaster if nothing happens. Some attributed

the problem to increased competition from other forms of gambling,

particularly lotteries; others blamed it on the intense competition for

the entertainment dollar in the Vancouver market.... Inadequate

facilities was on almost everyone's list."

Having said

that, what I'd like to do next is point out what horse-breeding means

to this entire province and particularly to Langley, the community that

I serve. In fact, over half of the thoroughbred breeders are in that

constituency, so it's extremely important to the economy and the

quality of life in my community.

On the breeder's part, the

cost of raising a thoroughbred to August of its yearling year is

approximately $12,000. The average selling price of the 157 yearlings

sold at public auction in 1987 was $5,244. The aggregate loss to

thoroughbred breeders, just with respect to this one crop, was in

excess of $5.1 million.

On the owners' part, the aggregate

cost for maintaining horses in training for racing at Exhibition Park

during 1987 was approximately $18.6 million. The total amount

distributed in purses for the same year was $8.6 million. The net loss

to owners in 1987, excluding capital costs, was $10 million.

The

economic impact on this province of the horse industry — both

thoroughbred and standardbred — is as follows. B.C. racetracks and

breeding-farms create 3,000 full-time jobs, $33 million in goods and

services and $28 million in wages annually. Net tax revenues to the

provincial government are $9 million. The total annual economic impact

in British Columbia in one year is $173 million.

Mr.

Speaker, this is an important industry. It goes beyond the racetrack

and the people who go there for entertainment and perhaps in pursuit of

dreams of coming away with money that they didn't have to work very

hard for.

The industry of horse-breeding, whether it's

standardbred or thoroughbred, is extremely important to the entire

province — the Fraser Valley in particular and also the Okanagan. Every

dollar wagered at B.C. tracks produces 35 cents in direct economic

activity in the racing industry, 52 cents in indirect activity and 5

cents in net revenues to the government.

I believe that the

economic viability of the industry is such that the government cannot

afford to waste any more time in finding a new location — or the same

location, but certainly a location — for a one-mile track. Without the

one-mile track, the industry will not survive in this province. I don't

think we can afford that.

I want to read one more statement from the task force report:

"These figures show that the economic relationships within

the thoroughbred industry are seriously out of balance. They also explain a

number of obvious trends in the industry. Many of the major owners have left

Exhibition Park and are either out of the business altogether or run their horses

in other jurisdictions. A number of breeders have become reluctant owners, because

they cannot sell their horses. Many trainers have become part-owners of horses

because their owners cannot afford to pay training expenses. The distortions

resulting from the economic imbalance are everywhere, and the migration from

the industry has already begun."

Mr.

Speaker, I believe that the industry is not an industry of rich people.

It is not a sport for kings. It's a sport, a lifestyle and an industry

for people who have chosen that particular lifestyle. I implore the

government.... I know that they're working diligently to find a way for

this province to have a one-mile track, and I urge them to work even

more diligently.

MR. ROSE : As a former resident of

Langley for a number of years, I can testify to the fact that it is

very horsey around Langley. However, I didn't expect to be saddled with

this response this morning, and I intend to share it with the other

side — what's left of it. There's only five minutes anyway, but I know

the former Attorney-General wanted to have a word, and I see the

Solicitor-General (Hon. Mr. Ree) all poised on the balls of his feet

there ready to jump up.

Let me start by saying that I agree

that the horse-racing industry is important for British Columbia.

According to all the information I have, it's in terrible shape. We

don't have decent facilities here.

I'm told that what they

want is a one-mile track, a turf course, a training track, a modern

grandstand, a clubhouse, turf club, modern sales pavilion for horses,

clean living quarters for backstretch workers, stabling for 1,200 to

1,500 horses and a landscaped area and parking lot for 4,000 to 5,000

cars at

[ Page 6752 ]

reasonable rates, which is one of the major reasons that I don't want it out at Colony Farm.

[11:00]

I guess it's the "not in my back yard" syndrome that I'm indulging

in again, but I am very much opposed, and so are residents of my

riding. The two councils are split on whether or not it should go to

Colony Farm. These are my objections to it: the choice would alienate

some 600 acres of the best agricultural land in B.C., more and more

land would be lost to parking and commercial development, environment

would be damaged, wildlife habitat would be destroyed and important

paths of recreational opportunities would be diminished. The proposal

is unlikely to receive approval from both municipal councils— maybe one

but not the other, and it's in two municipalities. The site is not

served by mass public transportation such as SkyTrain. The Port Mann

interchange is just a nightmare in terms of traffic. Nobody goes there

if they can avoid it, but unfortunately they really can't, and it's

right adjacent to it. There's increased traffic noise in the evening,

and uses will intrude into the suburban neighbourhood. Right along the

slope above Colony Farm, lots are selling for $80,000 a pop. I think it

would certainly denigrate a very important suburban area.

We want a racetrack, and we want decent facilities, but we want to put it in a place where it doesn't intrude on the urban area.

HON. MR. REE :

I wish to compliment the first member for Langley for her excellent

presentation, particularly in stressing the economic impact, the

economic importance, of the industry within this province. It certainly

has, and this government recognizes that impact and the necessity of

maintaining or enhancing the economic viability of the industry.

Mr.

Speaker, when you start to deal with people's lifestyles, or

particularly, shall we say, their vocations or employment, people get a

little bit upset - in fact, maybe sometimes more than a little. A great

number of the people involved in the horse-racing industry do it as a

love and as a hobby. When you get involved in that, the resounding roar

far exceeds what you might find otherwise, because it is one of their

loves; and we in government have recognized that. We recognize the need

for a first-class facility — maybe not a world-class facility — in this

province. That first-class facility is a one-mile track of a standard

configuration. Any other configuration or smaller size would not

enhance the industry in this province, and I don't think it could

survive with anything other than that. That is a goal of this

government: to try and find a responsible location where such a track

could be constructed and could survive, considering the number of

people who go to the racetrack, the people who invest in the racetrack,

the people who invest in horses, the owners and the breeders.

Recently

the federal government has passed legislation, called Bill C-7, dealing

with teletheatre licensing for off-track betting. We believe that to

enhance the industry this is needed. We do not necessarily agree with

the form of the federal legislation, that teletheatre betting or

off-track betting — outside the racetrack area — will be needed, in due

course, to make horse racing financially viable. But I will commit, as

the government, that such betting would be done on a very responsible

basis.

MR. SPEAKER : I regret to inform the minister his time is up under the standing orders.

MRS. GRAN :

I'll end my comments in this three minutes by simply talking about the

ownership of horses and what it means in a constituency like Langley.

will very gently remind the Solicitor-General that all breeders are not

doing it for a hobby. It's their lifeblood. They put a tremendous

amount of time and money into it, and often with very little return.

I've

visited many of my friends who are breeders, particularly thoroughbred

breeders, and during the breeding season if they get two or three

hours' sleep a day, they are lucky. It's hard work. It's hard work

physically. It's hard work mentally. In the breeding industry when

you're dealing with the births of foals.... And they're very expensive

foals; often the stud fees will be anywhere from $2,000 to — what? — a

million dollars for one foal. So if something happens during that

birth, it's a traumatic experience, especially if that mare happens to

belong to someone else, which is often the case. So I want it

understood that those people work hard for what they're doing.

They're

working hard not so much to gain monetary value but because of the

lifestyle and what that industry means to them. Langley would not be

the beautiful community that it is if it weren't for the horse

industry. I say that because of the rolling hills and the green grass,

and the agricultural land that is being saved for future generations by

those people, some on hobby farms, some in full-fledged businesses. But

the lifestyle that is enjoyed by the families....

I made a

little bit of a joke about women. But men, women and children in

families work side by side in this industry, and everyone gets

involved. It becomes their life: their social life and everything. I

think that a lot of people from the city move out to areas like Langley

so that they can get a horse for their youngsters, especially girls,

when they're getting to their teen years. They spend the time that they

might normally spend hanging around street corners and giggling with

the opposite sex.... They spend time working with the horses, with

their other colleagues in the industry, and perhaps spending valuable

time with people who understand the horse industry, instead of getting

into trouble. And that's a very real problem.

Anyway, thank you very much for the opportunity, Mr. Speaker.

HON. MR. RICHMOND : I call Committee of Supply.

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

[ Page 6753 ]

ESTIMATES: MINISTRY OF TRANSPORTATION AND HIGHWAYS

On vote 72: minister's office, $304,242 (continued).

MR. LOVICK :

Mr. Chairman, today I want to zero in on the whole subject of Highways

privatization — more specifically, the costs. I have a series of

questions I want to work through. I'm sure the minister will be very

pleased to respond to these questions because, of course, he takes some

pride in the achievements of that program.

To get directly

to it, let me just say this. On Tuesday the minister claimed that the

total savings of the highway maintenance privatization program would be

almost $106 million over three years on a theoretical expenditure of

around $1,172,000,000. The first question is: whose estimate is that?

Was that prepared by the ministry, or was it done on instructions from

a minister?

HON. MR. VANT : In terms of the projected

savings regarding the highways privatization, as we began these

estimates — this is in light of our discussions yesterday — I decided

that rather than have you wait for Public Accounts , I would table the

document of the actual costs of the road and bridge maintenance in all

28 of the contract areas throughout the province. I also wanted — which

I did — to table that audited statement of the original cost, so that

we had that very necessary baseline, and you wouldn't be taking my or

my ministry's word for what the costs would be. You had to have that

base cost in order to project three years down the road to compare the

cost of the maintenance contracts on the one hand with what the cost

would have been if it had been business as usual and the government

itself was still doing the road and bridge maintenance.

Coopers

and Lybrand is a very well-known, internationally renowned and

well-respected firm of chartered accountants, so we engaged their

services to come up with the figures. It's quite correct, as you

indicated. The direct and indirect savings to government as a result of

the privatization process is actually $105.97 million.

MR. LOVICK :

The direct savings you refer to amount to some $22 million — about $7

million a year on that expenditure I quoted earlier. Then the minister

identifies a further $23 million in "indirect benefits" such as school

taxes, motor vehicle licence fees and corporation income tax. I wonder

if that's playing entirely fair with the taxpayers and the public of

the province, because if we talk about indirect benefits such as that,

it seems to be assuming that private entrepreneurs would just be

sitting around unemployed, not doing anything and not paying any taxes.

The fact is that that already was happening. Is that indirect benefit

new money?

HON. MR. VANT : In a sense it is, because

as I understand it, the ministry itself was not responsible or didn't —

under the Highway Act and so on — have to pay things like

school taxes, motor vehicle licence fees, social service taxes,

corporate income taxes and those things. In a sense, what we did as an

indirect benefit of the privatization process was to create new sources

of revenue for the provincial government. This is indeed a plus on the

revenue side for government; therefore it is very definitely an

indirect benefit as a result of this privatization process.

MR. LOVICK :

I want to talk a little bit about that methodology of cost estimates.

On September 2, 1988, the minister issued a press release and stated in

that document that service standards would not decline, and that

highways maintenance would not cost the government more money. The

minister also said: "Two independent national chartered accounting

firms have verified the methodology used to determine those ministry

costs." How did they do that? What were these accounting firms asked to

do exactly, and how much did we pay for that accounting?

HON. MR. VANT :

That's a very good question. Coopers and Lybrand went through a very

detailed way of calculating just what the direct and indirect savings

would be. I'll just look up the details of that. It was a very complex

process, because they had to audit all kinds of things.

[11:15]

I would refer you as well to the auditor-general's audit, which was

done, in detail, of contract area number 1. You have read that, and

that was a sampling. Naturally they wanted to have a detailed look.

That process started while we were still in the process of privatizing

other contract areas. Indeed, we didn't finish the last one until March

31, 1989. 1 quote his report:

"In our

opinion, the process followed to privatize road and bridge maintenance

operations on southern Vancouver Island was adequate to provide the

information needed to evaluate the value-for-money consequences of this

privatization. Furthermore, we believe that the representations made by

the government about this privatization were fair and sufficient for

the legislative assembly and public to judge the value-for-money

achieved from it." Our estimate was very accurate regarding the savings

on that particular contract area."

Now I would like to move

on to your question — and I'm leading up to that — regarding the further

process of Coopers and Lybrand. What you are asking is the validation

of our historic costs; that's part of the process that Coopers and

Lybrand was engaged in. Unless we have a firm grasp of what those

historic costs were, I don't know that we could really verify the

savings over the three-year contract period.

The second one

was to assess the benefits and savings of privatization relative to the

ministry's projected costs. The third — a very important part — is the

audit of the value of sales and leases of the equipment.

As the hon. member opposite knows, we did, in our wisdom, actually sell some of the small hand-

[ Page 6754 ]

tools and smaller pieces of equipment. We very wisely decided to lease the heavier pieces of equipment at commercial rates.

The

cost of the Coopers and Lybrand activities in regard to these three

major things amounted to $120,000 for all those audit services.

MR. LOVICK : Is the Coopers and Lybrand report you refer to the same one you tabled in the House yesterday or the day before?

HON. MR. VANT : In terms of the validation of our historic costs, yes.

MR. LOVICK :

I am a little puzzled by that, Mr. Minister, because the Coopers and

Lybrand item tabled yesterday is dated January 8, 1989, and the press

release I quoted from, which talks about the two independent national

chartered accounting firms, is dated September 2, 1988. Could you

explain that discrepancy to me? There must be some confusion.

HON. MR. VANT :

What the hon. member is referring to are auditors also engaged by the

privatization group, which was a separate engagement of a different

accounting firm, I believe.

MR. LOVICK : Also on

September 2 — the date of the press release — I sent a letter to the

ministry, you will perhaps recall, asking for copies of those

verifications of the two national chartered accounting firms. Twelve

days later you responded by saying: "I will consider your request for

this information and will advise you at a later date as to the

availability of this information." Have you decided to release all

those verifications now? You just established and emphasized that we

weren't getting all but rather a part of, and I am wondering if you

have decided now to release all of those, and if not, why not?

HON. MR. VANT : The end result was the Coopers and Lybrand statements, which I have in the last couple of days tabled in this House.

MR. LOVICK :

But is it not true, Mr. Minister, that we are talking about different

evaluations? There are a number of those, and what you tabled in the

House yesterday had to do rather with the historic costs. Is that not

the case? We are not talking about all the documents that were first

referred to; rather, we are talking about a part of.

HON. MR. VANT :

I think we are, indeed, talking about two separate sets of documents.

For the purposes of your original question this morning on the direct

and indirect benefits of privatization, I feel very confident that the

information I have tabled gives the necessary information to verify in

a proper manner the savings and benefits to this government as a result

of privatization.

If the member wishes me to elaborate a

little bit on the process of the projections in response to more

specific questions, perhaps I could respond to them as we proceed.

MR. LOVICK :

I am going to let that pass for a moment. I think we still have a

problem. We are talking about two different sets of information. Let me

come at some other things, because I do want to focus very directly on

the information that was tabled, which I have reviewed. I do want to do

that.

The minister said, and again I quote: "Because of

competition and to protect the integrity of the tendering process, I

will not be making available a detailed breakdown of our historic costs

by contract area...." Whose decision was it not to release that

information, Mr. Minister? Since you said "I," can we take it that

that was your decision, made on your own judgment, or rather on the

basis of instruction? Whose decision?

HON. MR. VANT :

I think the hon. first member for Nanaimo has to agree that it's very

wise and prudent of this government, in all situations where we are

engaged in negotiations from time to time for entering into a contract

to have private-sector firms provide services to government, for us to

be very conscious of our obligation to the taxpayers of the province to

negotiate the very best possible deal, if you will, for having those

services provided at the most reasonable cost. For us to reveal the

financial details of each of those 28 contract areas would place us in

a very vulnerable position regarding future negotiations.

the same time, however, we certainly make available the very precise

details of the maintenance qualifications and standards necessary for

performing the actual job. It's just that the very delicate

negotiations about the remuneration for those services are very

sensitive, because of the nature of entering into an agreement.

You

must admit, too, that each of the 28 contract areas is unique. There

are some small areas and some larger areas, and one area would have

maybe twice as much equipment as another area or twice as many

kilometres of road. There are so many variables in there. It wouldn't

serve any useful purpose for us to reveal the actual historic costs in

each area, but we have given the overall audited base cost, and it's

for that reason we've done that.

MR. LOVICK : I'm

interested to hear that rather passionate explanation, as these things

go, of your decision not to release the historic information cost,

because you have. Historic information costs are available. In fact,

they're available for all 28 areas of the province. They are available

from the years 1982 to 1987. Your ministry staff supplied that material

to us. The privatization group did the same. We thought they'd done so

on the minister's authority; we just assumed that that was the case. We

were grateful. The question is, though, if this information has already

been made available to the people who bid on the opportunity, and to

the opposition, why shouldn't it be made available to the public? Why

shouldn't they also have access to that information?

[ Page 6755 ]

How

could the integrity of the bidding process be impaired by making

available the historical records which are already well known? How

could that be?

HON. MR. VANT : There's only one

little glitch in your idea here regarding the information which was

previously available, because that information includes a lot of

functions which the ministry is still doing. So in a very real sense,

anybody using those figures would be comparing apples with oranges.

There are certain things that we're asking the maintenance contractors

to take on where historically the costs were shown in other areas.

Those figures aren't the same as a breakdown of the actual road and

bridge maintenance contracts in each contract area.

MR. LOVICK :

I would suggest that by a close analysis of the ministry data from 1982

to 1987 we can break it down very thoroughly. We used to have, you

recall, very detailed reports from the Ministry of Highways. We know

about every seal-coating project in the province, for heaven's sake. We

can do that; we know what the costs are. Mr. Minister, are you telling

us that the privatized contractors are now doing a whole bunch of extra

stuff? We're getting more service than we had before? Is that what

you're saying? That's why you can't give me that answer?

HON. MR. VANT :

I can assure the first member for Nanaimo that the exact same

information broken down would not yield exactly the same answer that

you're seeking. It would be a pretty tough exercise to separate all the

historic costs and the ones that are now actually being contracted out.

But I want to assure the member that a breakdown — like how much

seal-coating took place in the Nanaimo constituency — will still be

available if he is seeking more detailed information about some

specific function. Some of these are still performed by the government;

some, of course, are still paid for by government but performed by a

private contractor.

[11:30]

MR. LOVICK :

If I understand your answer aright, Mr. Minister, you're telling us

that we will never know all the answers to the question of precisely

what is in those contracts.

I note that on Tuesday, the

same date I referred to a moment ago, you said you would not be

releasing the contracts that were signed for the 28 contract areas. I

just want to remind you, Mr. Minister, that this is in direct

contradiction to what your former deputy minister, Bob Flitton, had to

say. Your former deputy said in a news release dated September 2, 1988,

that we would at least get the contract for area 1, southern Vancouver

Island. Whose decision was it to reverse Mr. Flitton's decision? Did

you do that, Mr. Minister?

HON. MR. VANT : That refers, of course, to my former deputy. He made

that statement at that time, but it is the minister who makes the final decisions

regarding direct responsibilities of my Ministry of Transportation and Highways.

Whoever may be my deputy minister ultimately gets his orders from me.

MR. LOVICK :

Sounds like a derivative of Louis saying, "L'tat c'est moi," or some

such thing. I'm intrigued by that. You are, however, saying there has

been an abrupt, direct and discernible change in policy. When that

particular deputy left, you changed the policy. It was intimated to the

press and to others that eventually the details of contracts for all 28

areas would be released. That was the policy as everybody understood it

at the time. 1 hope the minister will agree with me. I will ask the

question: would you agree that that was the case? Would you agree with

me that we have now reversed our decision on that policy?

HON. MR. VANT :

All I can do is emphasize the current policy. As I said earlier, the

very important maintenance standards, which are very precisely

specified, will be available. Those very precise maintenance standards

were actually put down in writing for the very first time, I think that

was an exceedingly useful exercise on the part of my ministry, to come

up with those very precise, all-important maintenance standards.

Actually specifying them in writing ensures the safety of the traveling

public in our transportation system. To me, that is a very important

part of those agreements between the government and the various

contractors.

It is not unusual — in fact, it is standard

practice for the government and indeed all of the ministries — for us,

to protect the interests of the taxpayers whom we represent, not to

reveal the financial details of an agreement between us and private

parties that are providing services to government. Naturally we want to

be in a position down the road to negotiate the best possible agreement

we can to ensure that we are dealing with very competent parties in a

very cost effective manner.

MR. LOVICK : Well, I

guess this is a rhetorical question rather than a direct one, though I

certainly extend an invitation to the minister to answer it if he

wishes. If these are such good deals, if the public is doing so well,

why aren't you anxious to tell us about them? Why aren't you anxious to

show us the deals, so we can check, compare, feel good, feel

vindicated, and say: "Ain't things lovely"? Why are you reluctant?

That's the obvious question. But as I say, that's rhetorical, so let me

come now to the more direct one. You can pick it up in a minute if you

want.

The minister assured taxpayers: "The bottom line is

that we will pay less." I will give you the reference for that, Mr.

Minister, if you want. It comes from a statement in the 100 Mile House

Free Press , dated January 25, 1989. You have vowed highway costs will

be cheaper, and you are quoted as saying that we will pay less. That

was your commitment, which was going to be the justification for the

process. Do you stand by that commitment, Mr. Minister?

[ Page 6756 ]

HON. MR. VANT : Yes, the statement was that we'd be paying less than if we were continuing to do the road and bridge maintenance ourselves.

want to further say, for the information of the hon. first member for

Nanaimo, that of course all of these agreements between the government

and the contractors are subject to audit by the auditor-general. As you

can see in his report, we are certainly achieving value for the

taxpayers' money that we are spending.

Interjection.

HON. MR. VANT :

No, no. There is an actual audit by the auditor-general. Surely that

should satisfy the hon. member opposite. It is normal government

practice, as I said earlier, no matter which ministry is involved, not

to reveal the specific details concerning the financial aspect of an

agreement, in order not to put us in a very precarious position, as

down the road we'd be entering into negotiations in very properly

achieving contracted services at the correct price.

MR. LOVICK :

I take it that that rather detailed answer was a yes. This was an

affirmative that you do stand by the commitment that service will cost

less? We will pay less? I notice the minister is nodding, and I will

take that as a given.

Let's try another direct question.

The minister has repeatedly as well offered assurances that service

standards will not decline under highway privatization, and he points

to the service standards themselves to support his position. What the

public wants to know, of course, is whether the ministry in these 28

contracts has purchased the same quantity of service in the period of

1989 to 1992 as the ministry crews carried out in the period of 1982 to

HON. MR. VANT : Yes, absolutely — not only the same quantity, but for sure the same quality, if not improved quality of service.

MR. LOVICK :

I have another direct question then. If you make that claim, Mr.

Minister, are you willing to produce the

schedule of quantities so that

the public may check and compare? Are you prepared to release those —

not the details of the contracts specifically, but rather the

schedule

of the quantities?

HON. MR. VANT : The precise

standards which are available very clearly specify the obligations and

the amount of services to be rendered. As I indicated in my initial

speech, part of the tendering process involved the road inventory and

the bridge register, for example, in each of these contract areas. It's

quite specific.

MR LOVICK : Let's look at the document that you tabled and the information

that you provided. You've given us the commitment that we won't have

a reduction in service, and that we will be paying less. Assuming that the service

has remained the same — in other words, that there have been no cutbacks in

service — the figures you released suggest that the public is paying about 48

percent to 50 percent more for services than they were when those services were

delivered by ministry crews.

Let

me show you how. I should have brought an extra copy of your document;

this is your information. We reached the conclusion in this way. First

we use the information supplied by the ministry for the period 1982 to

1987. We have all that information, of course. We then calculate the

average spending per contract area. That becomes the first figure for a

period from '82 to '87.

Second,

we take the average

obtained for '82-87 and inflate it by a factor of 5 percent per year,

just as the minister recommended when he referred to appendix H of the

budget. As I say, 5 percent per year for the projected annual average

determined for each of the three years to get the projected annual

average for those three years covered by the contract '89-92. We then

take the contract figures for the privatized maintenance contractors,

the ones listed in the Coopers and Lybrand report, divide that by three

— that's a fairly simple matter — also inflated by 5 percent annually,

and we come up with some rather startling conclusions that indicate

that the privatized maintenance.... Surprise, surprise.

Well,

come on, Mr. Minister, don't smile. Hold it. We're talking about

providing the service between '89 and '92, and we're using the same

quantities, the same levels of service we've been guaranteed we're

going to get, based on ministry figures. We've factored in inflation,

done the calculus in terms of three years as opposed to one year, and

the conclusions are very clear. The conclusions are very obviously

stated that we are apparently paying significantly more. Do you want me

to quote you some? Do you want me to give you some specific examples?

AN HON. MEMBER : Why don't you do that.

MR. LOVICK :

All right. Between '82 and '87 — let's take number 1 on the list; we'll

provide you with the list — the annual average for South Island was

$6,126,229. For the '89-92 estimated annual cost under public

management,

using your methodology for calculating private contracts, i.e., the 5

percent inflator, as recommended in budget appendix H, we get a

different figure: $7,390,326. Then we take the '89-92 annual average

under privatization, and we discover a figure of $10,126,351. The

percentage difference between '89 and '92 under public management

versus the private one of your system, based on your data, is a 37

percent difference. We do that with all those 28 contract areas, and we

come up with a tremendous difference in cost between the public

operation of some $169,848,000 versus some $250,560,510 under your

system of privatized maintenance. That's done. It's not a complex

analysis; I think it's a correct analysis. If you have difficulty with

it, I would certainly like to know why.

[11:45]

[ Page 6757 ]

will say to you now what I've said from the beginning: if you want to

prove us wrong, go ahead. Show us the details of the contract; that

would be the easiest way. Show us the contract quantities; show us

where we're making the mistake; show me what's wrong with the

mathematics of this. Don't, however, do what you've done before on a

number of occasions, when you've simply said: "They don't know what

they're talking about. They don't understand the figures." What's wrong

with that analysis, Mr. Minister? I see you've got three of your staff.

I'm sure you can provide me with an answer, and I look forward to

hearing it.

HON. MR. VANT : Those are very

interesting figures the first member for Nanaimo has mentioned. He's

all over in terms of the years '82 to '87, and we'll certainly have a

detailed look at them. But a question I have for him is: did he have

all these figures he's been mentioning audited?

MR. LOVICK : They're your figures, for heaven's sake.

HON. MR. VANT :

I would like to explain to him that after the 1987-88 costs were

determined and the amounts audited and verified by Coopers and Lybrand,

the figure produced was compounded by the inflation rate provided by

Treasury Board. This inflation rate was 4.1 percent for the first year

and 5 percent for the remaining two years of the contract As the first

contract was not contemplated to come on line until September 1988 —

and we were working with 1987-88 actuals — the first year was

compounded for 18 months. Therefore 6.15 percent was added for the

first 18 months and five percent for each of the remaining two years.

The audited figure which you received in that Coopers and Lybrand

document that I tabled the other day came out at $229.06 million after

inflation, producing a projected ministry cost of $773.11 million for

the three-year contract period. The contractor bids for the 28 contract

areas produce a firm three-year contract price of $751.59 million;

therefore there is a direct saving, between the projected government

cost and the fixed contractor price, of $21.52 million. The hon. member

opposite could certainly refer to that exact same figure on table H,

which is in the Minister of Finance's report.

I'm happy to

report at this time, of course, that all 28 contract areas are now

signed and operational. So we have these audited and verified very firm

figures, which compares.... Those inflation figures could, as time goes

on, prove to be very conservative. Only time will tell. But our

advisers tell us that this is a very reasonable inflation rate. Coopers

and Lybrand did a very careful process in determining that

all-important base cost, because if that is not verified and audited,

then we don't have the necessary take-off point for an accurate

comparison, which I know the member opposite is very anxious to have.

MR. LOVICK :

In short, you aren't going to respond to those figures, the means of

calculus. You're not going to say: "Here's what's wrong." You're just

going to say: "Well, I'd rather not talk about those; I'd rather talk

about Coopers and Lybrand. I'd rather talk about contract quantities

that we know about and you don't know about, and you can't have." I

want to talk about service levels and ask for your assurances that

those are indeed the ones we used to have before.

I'm

suggesting to you, Mr. Minister, that the process we go through is very

straightforward and, I think, absolutely correct. We're talking about

average cost. We used the same five-year period that you provided to

the potential bidders which your ministry determined would provide them

with a good base on which to know and calculate historical costs. We

took your figures for an inflation factor. And even if we go with yours

— which were what, 4.155? Let's assume we did 5-5-5; the difference is

still not going to be that outrageously larger.

In short,

I'm standing by this analysis. I'm saying that what we did, I think, on

the basis of any kind of normal, rational evaluation, would lead one to

the conclusion that we are paying more. Your answer is to say: "Well,

let's look at what the auditor-general had to say about area 1." I am

going to talk about the auditor-general's report; I have a number of

questions about that. But I do not think, with all due deference, Mr.

Minister, that you have in any way refuted the claim we're making. I

would offer you, then, the opportunity to look at that calculus that

we've Just completed, which I went through in painstaking detail. Tell

me what's wrong. Where is it in error? What's wrong? It may not have

the exactitude you would wish, sir, but certainly it is going to take

us very close to the truth. And the truth, I think, is indeed evident:

that we are, to judge from the evidence you tabled in the House, paying

more.

HON. MR. VANT : Mr. Chairman, naturally I

disagree with the member's last statement. We definitely are not paying

more. But for sure we would be happy to review the hon. member's

numbers, provided he gives us in writing his methodology; with this, we

will certainly be able to show the errors in his method and dispel his

figures.

MR. LOVICK : I'm very pleased to learn that,

and I'm happy to inform the minister that I shall indeed be prepared to

provide him with that information, if he is prepared to give me an

assurance that when we next come to these estimates on Monday, he will

give me a formal answer to that analysis. I am more than prepared to do

that; the quid pro quo, though, is that I want an answer in return. Can

he give me that assurance?

HON. MR. VANT : That would, of course, depend on exactly when we receive the written description of his calculations and his methodology.

[ Page 6758 ]

MR. LOVICK :

This begins to take on the appearances of a pas de deux or something,

this lovely dancing back and forth. I can assure the minister that I

will get that information to his office within half an hour of

adjournment.

HON. MR. VANT : Certainly we'll do our

best to carefully consider his calculations. We've been willing to lay

on the table of this Legislature facts and figures audited by a

renowned chartered accountant firm that has an international reputation

for being very competent to do that important work. As I have said, for

the most part the auditor-general's report describes in some detail the

privatization process undertaken by this particular ministry. I must

say, as the minister responsible at this time, that I'm very pleased

with his report.

MR. LOVICK : I see the lateness of

the hour, and I would therefore respectfully move that this committee

rise and report progress and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Richmond moved adjournment of the House.

Motion approved.

The House adjourned at 11:55 a.m.

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