May 5, 2004 Alberta Hansard 1251 Legislative Assembly of Alberta Title: Wednesday, May 5, 2004 1:30 p.m. Date: 2004/05/05 [The Speaker in the chair] head: Prayers The Speaker: Good afternoon. Let us pray. As Canadians and as Albertans we give thanks for the precious gifts of freedom and peace which we enjoy. As Members of this Legislative Assembly we rededicate ourselves to the valued traditions of parlia mentary democracy as a m eans of serving our province and our country. Amen. Please be seated. head: Introduction of G uests The Speaker: The hon. Minister of Sustainable Resource Develop- ment. Mr.

C ardinal: Thank you ver y much, M r. Sp eaker. It is my pleasure to introduce to you and through you to the members of the Assembly a group of seniors from the Boyle Wildrose Villa in my constituency. They are seated in the members’ gallery. I’d like them to rise or wave and receive the traditional warm welcome. The Speaker: The hon. Minister of Children’s Services. Ms Evans: Thank you, Mr. Speaker. I am privileged on beh alf of the hon.

Minister of Learning, who is in the air and plans to land any moment but was not able to be here, to introduce a delegation that is here today to meet both the Minister of Learning and the Minister of Community Development. The mayor of the town of Brooks, Don Weisbeck, and the reeve of the county of New ell, Cory Baksa, are accompanied by two councillors, Clayton Johnson and Kerry Crapo. Would they please rise, and would we all give them a wonderful and warm welcome. Thank you so very much. The Speaker: The hon. Leader of the Official Opposition. Dr. Taft: Thank you, Mr. Speaker.

It’s my pleasure to introduce to you and through you to all members of the Assembly one of the key members of a fabulous group of young Alberta Liberals who’s very involved, very interested in politics and is an eager supporter of ours. She is in the public gallery today. Her name is Jennifer Krauskopf. I’d ask her to rise and receive the warm welcome of all MLAs. Thank you. The Speaker: The hon. Member for Calgary-North Hill. Mr. Magnus: Thank you, Mr. Speaker.

It’s a pleasure for me today to stand and introduce to you and through you to Members of this Legislative Assembly a friend of mine and a f riend of many of us here. His name is Pete Davis, and I’d ask that he stand in the gallery and receive the warm welcome of this Assembly. The Speaker: The hon. Member for Whitecourt-Ste. Anne. Mr. VanderBurg: Thank you, Mr. Speaker. I’d like to introduce Mr. Lorne Olsvik, former deputy mayor of Onowa y and former president of the AUMA. Mr. Ol svik is a resident of Onoway and currently with TrackFlow, an international software company. He’s seated in your galler y.

I’d ask him to rise and receive the wa rm welcome of this Assembly. The Speaker: The hon. Member for Edmonton-Glenora. Mr. Hutto n: Thank you very much, M r. Speake r. I’d like to introduce to you and t hrough you a very remarkable young man, Kyle Lillo, who used his own experience with disability to help him have a true impact on disabled children in the community and has done it remarkably well. I met Ky le when I was a director of the Glenrose Rehabilitation Hospital Foundation. He came to me with the idea o f making the hospital a much brighter place to be as a child.

Our foundation agreed to match any funds Kyle raised. Kyle Lillo is t he found er and chief promoter and operator of Kyle’s Toy Cart, a vehicle he uses to bring toys to the children on pediatric unit 201 at the Glen rose rehab hospi tal. In doing so, he brings jo y, friendship, and a sense of inclusion to the lives o f children who are recover ing from or adjusting to a signifi cant disability. Kyle ’s Toy Cart m akes monthly trip s to the unit and inspires children with new toys, ga mes, and books. There is a noticeable stir when Kyle arrives and it is announced to the children that Kyle is in the building.

Kyle is also a recipient of the Alberta Great Kids award. I would ask you all to plea se recognize Kyle and his c aregiver, Lillian Koch, and accord them the warm welcome of this Assembly. The Speaker: The hon. Minister of Seniors. Mr. Wolos hyn: Thank you very much, Mr. Speaker . I’m v ery pleased to introduce to you and through you to the members of the Legislature 81 visitors from Graminia school. Graminia schoo l is one of the original community schools in this province, a very fine school in my own neig hbourhood . They are ac companied by teachers Mrs. Gloria Wolff, Mrs. Lorraine Hennig – Mrs.

Lorraine Hennig is a very special person; she used to be my student, was my colleague in teachi ng, and is now a teacher in the area – and Miss Michelle Pernisch along with parents Mrs. Lussier, Mrs. Carefoot, Mrs. Mailma n, Mrs. Frank s, Mrs. Skocylas, Mrs. Nurani, Mrs. Weiland, Mrs. Zuidema, Mrs. Champoux, Mrs. Kr awchuk, Mrs. Nonay, and Mrs. Gibson. I’d ask the students and the parents to rise and receive the we lcome of the Ass embly. The y’re in the public gallery. The Speaker: The hon. Member for Drayton Valley-Calmar. Rev. Abbott: Thank you, Mr. Speaker.

It is a great pleasure to rise on this glorious Alberta day. Actually, I’m rising on an occasion of an innovation of your own, and that is the idea to bring in seniors to visit the Legislature. Today I have my very first seniors’ group ever, visiting the Legislature from Drayton Valley. They are led by group leader Norma Wall. There are 39 of them, and they had a long bus ride here to day. I’ d ask them all to rise and rece ive the w arm welcome of this Assembly. The Speaker: The hon. Member for Grande Prairie-Smoky. Mr. Knight: Thank you, Mr. Speaker.

It certainly is a pleasure for me to rise toda y and in troduce to you and t o all me mbers of this Assembly 19 bright stude nts from the Rich Val ley school i n t he riding of Grande Prai rie-Smoky. They are accompanied today by their teacher, Ms Susan Thomson, and by parents and helpers Kevin Thompson, Brent Minni, Danny Scott, Jodi Danielson, Julie Zenner, and Shelley Lenes. I would ask them to rise now and receive the warm welcome of this Assembly.

Alberta Hansard May 5, 20041252 The Speaker: The hon. Member for Edmonton-Strathcona. Dr. Pannu: Thank you, Mr. Speak er. It’s my distinct pleasure to introduce to you an d to all m embers of the A ssembly Mrs. S onia Varela. Mrs. Varela is a highly respected leader in the Chilean community of Edmonton. She is a pass ionate advocate of human rights and social justice and regularly volunteers with Edmonton’s Food Bank. She is here this afternoon to observe the proceedings of the Assembly.

Sonia is seated in the public gallery, and I would now ask her to please rise and receive the warm welcome of the Assem- bly. head: Oral Quest ion Peri od The Speaker: First Official Opposition main question. The hon. Leader of the Official Opposition. Automobile Insurance Reform Dr. Taft: Thanks, Mr. Speaker. The auto insurance reform plan currently before government MLAs will not save any money for 80 per cent of good, experienced drivers. Tha t contradicts promises from the Premier himself and his Finance minister. To the Premier: given the contradictions, what are Albertans supposed to believe? Mr. Klein: Mr.

Speaker, what Albertans are to believe is precisely this. The regulations surrounding the government’s auto insurance reforms are still working through the process. That Albertans can believe. No decisi ons have be en made , so I can’ t comm ent on speculative media reports or speculative Liberal reports about what will or won’t be approved. No decisions have been made about the detailed regulati ons, so it’s premature to be talk ing about the government breaking its promise.

No decision has been made. 1:40 Our basic goal with auto insurance – and I’m sure the Liberals will agree with this – is to have premiums that reward good drivers and penalize poor drivers and to fairly compensat e accident victims. That makes a lot of sense. My commitment that rates in Alberta will be comparable to those in other provinces still stands. Now, I don’t know if it’s going to be lower or higher than in Saskatchewan, but it will be comparable within, I said, $5, $10, $15, $20, and that’s not unreasonable.

I would add that the ref orms are based on personal responsibility, and good drivers will pay competitive rates, and bad drivers will pay more. The Speaker: The hon. leader. Dr. Taft: Thanks, Mr. Speaker. Can Albertans have any faith in this government’s auto insuranc e plan whe n t he governm ent is now trying to claim that the premium rate f reeze was actually a rat e decrease? Mr. Klein: Mr. Speaker, I don’t recall that claim ever being made, but I’ll have the hon. Minister of Finance respond. Mrs. Nelson: Mr.

Speaker, the actions that we took in the fall as a government to protect Albertans and consumers of au tomobile insurance were clearly in an ef fort to stop t he continual s piralling costs from being passed on to consumers. We put a freeze in place for those people whose premiums were being renewed from October 30 onward at the previous year’s rate, so they saved dollars from the current rate that they otherwise would have had. That was the first step in protecting Albertans from the increa ses.

Now, we weren’t able to do it for those that had already had thei r rate in creases, but they will receive a ben efit this sum mer as the new plan com es in place. Clearly, putting the freeze in stopped the massive increases that were taking place, and those were passed on to consumers. In fact, if some were in the mix and already had received their bill, they have since received a cheque back from their insurance company or they have received a credit on their statement or their policy was rewritten and a new one sent out to re flect t he previous year’s rates. S o they’ve already experienced those savings.

The Speaker: The hon. leader. Dr. Taft: Thanks, Mr. Speaker. What exactly is prevent ing this government from introducing public auto insurance now? Mr. Klein: Mr. Spea ker, first of all, no one is ask ing for it . Secondly, I would remind the hon. Leader of the Official Opposition that it was this governmen t t hat took the initiative to address the whole problem of insurance premiums. In that r egard the hon.

Member for Medicine Hat was a ssigned to do a surv ey and t o investigate the situat ion and p repare a repor t as to w hat could be done without going into a socialist system, which the NDs and the Liberals so admi re, and at the same time still protect cons umers under a regulated system. It’s as simple as tha t. As I said previ- ously, we are now working through the regulations. Executive Council Travel Ms Blakeman: Mr. Speaker, the Premier said that part of the trip to Fox Harb’r golf resort was reimbursed by the Tory party.

A receipt provided by the Pre mier in the Public Ac counts C ommittee is labelled by hand for some costs associated with Fox Harb’r. While no details are provided on what was covered, it does show almost $1,200 being pai d. M y questions ar e to the Prem ier. Wil l the Premier now provide details and receipts for the government portion of this trip? Mr. Klein: Mr. Speaker, fine. Someone, please, take the question under advisement and provide the hon. member with whatever she wants if we can find i t. Please, y ou know, g et it off my back.

I mean, as I sa id, they’re talki ng about Exe cutive Co uncil trav el: 1/10,000 of 1 per cent. You would need a computer the size of this Legislative Assembly to compute what $800 means in the scheme of the overall provincial budget, I think. Mrs. Nelson: Twenty-three billion. Mr. Klein: Well, $23 billion, $800 – I don’t know. I have no idea how to calculate that. But, my God, if all they want, if all they can think about is $800 and that recei pt, then, pleas e, whoever is out there listening, help me w ith this and provi de them with the information. Get them off my back. The Speaker: The hon. member.

Ms Blakeman: Thank you very much. Again to the Premier: did the Tory party reimburse any expenses for the India trip taken in January of ’04 by the Premier, the Minister of Community Development, some government MLAs, and others? We re any of those rei m- bursed? Mr. Klein: I’m sorry. The q uestion was: did the party pay? No. That was one hundred per cent.

May 5, 2004 Alberta Hansard 1253 Mr. Speaker, just to go back to the Fox Harb’r trip, I said earlier that that trip was part business and

part vacation. I was invited to the event by Ron Joyce, the former CEO of Tim Hortons, and attended in my role as Premier. Other Premiers were invited as well. I don’t know if any others attended. I can’t recall. I had the chance to meet with business le aders, as I say , from around North A merica and promote Alberta. I also used the trip to play some golf. That’s why roughly half of the $2,500 tab was paid back by the party on my behalf. Right? It didn’t cost tax payers. That’s the $1,200, roughl y, that the hon. member refers to.

P eter Elzi nga, my former chief of staff, paid approximately $1,200 personally and then obtained reimbursement from the p arty. A re cord of tha t payment is ava ilable from m y communications staff, and I understand that they do have a record of that payment. I know that previously it had been reported that the party paid up to $2,000 of the $2,500 tab. That’s what I was advised. However, unfortunately, that was an error that wasn’t noticed until last week when we went back to the 2002 financial records.

But I believe that overall the half -and-half paym ent set-up a ccurately ref lects the mixed business/personal nature of the Fox Harb’r trip. Now, Mr. Speaker, I will say this as well. As I was travelling to Nova Scotia any way for a Prem iers’ Conference, there were no additional a irplane cos ts incurre d as a re sult of the Fox Harb’r stopover in that it’s on the way to Halifax. It’s about, I think, one hour by car and maybe 15 minutes by airplane from Halifax, so it was on the way. We flew over it, so we stopped.

There might have been additional costs relative to landing the plane and the gas used in taking off. Now, if they want that, we’ll try and figure that out too. The Speaker: The hon. member. Ms Blakeman: Thank you. Again to the Premier: did the Tory party reimburse any expenses for the trip to Mexico in September of 2002 taken by various members of Executive Council? Mr. Klein: No. The Speaker: The third Offi cial Opposition main question. T he hon. Member for Edmonton-Riverview. Requests for Information Dr. Taft: Thank y ou, M r. Speak er.

Last Thursday the L iberal opposition made an appointment for the nex t day to view publicly available flight manifests for government aircraft for 2000 to 2003. The Premier has since admitted that he was phoned by his staff that Thursday evening and inform ed of our a ppointment. The next morning our appointm ent was cancelled on us, and the mani fests were suddenly classified under the so-called freedom of information laws. To the Prem ier: will the Premier admit that this is bla tant political interference in the due process of government? Mr. Klein: No.

What I will admit is that the approach the Liberals took was blatant political gran dstanding. Was blatant political grandstanding. Mr. Speaker, as I said in the media scrum yesterday – a nd this hon. member knows because he was there. He attends every scrum along with his little researcher. Mr. MacDonald: He’s bigger than you. 1:50 The Speaker: The hon. Premier has the floor. He can continue. Mr. Klein: Mr. Speaker, as I pointed out yesterday in the scrum, Mr. and Mrs.

Gr undy or Mar tha and Henr y, normal Albertans, don’t appear at the govern ment ha ngar reque sting 10 y ears’ worth of documents, manif ests, som e 12,000 diff erent do cuments, don’t request the use and the tying up of over 50 hours of public service employee or employees’ time , doesn’t arrive decorated w ith a microphone, with a bevy of media. So I suspect that there was some media grandstanding going on. Dr. Taft: To the Premier: is the Premier routinely informed by his staff of infor mation requests from the L iberal opposit ion and th e media? Mr. Klein: Not r outinely. Sometimes.

Although I suspect that many FOIP requests are from the Liberals or from the media, FOIP requests are kept confidential. You can tell by the questions that are being asked that Martha and Henry or Mr. and Mrs. Grundy are not asking those questions, because when you listen to the questions and the kind of information they’re seeking, you say: “Gosh, this sounds like a request from the Liber als or the media. I wond er who’s trolling, who’s casting. I’m sure it’s not Martha and Henry.” The Speaker: The hon. leader. Dr. Taft : Thank you, Mr. Speak er.

Is inf orming the Premier of information requests from the opposition and the media part of this government’s surveillance system of information requests? Mr. Klein: Mr. Speaker, as far as I know, we are not spooky. No. This is a demo cracy, and we don’t set up surveillance systems. Maybe the Libs do – I don’t know – but we don’ t have a s noop squad. No. The answer is no. The Speaker: The hon. leader of the th ird party, followed by the hon. Member for Calgary-Currie. Education Funding Dr. Pannu : Thank you, Mr. Speaker.

Two w eeks ago during estimates debates I urged the Minister of Learning to make public the funding profile for all school boards and charter school s in the province. Now tha t that h as happened, school board a fter school board is saying that these numbers can mean no new teachers, zero reduction in class sizes; in other words, no implementation of the Learning Commission’s recommendations. My questions are to the Minister of Learn ing.

Gi ven that school boa rds like E dmonton public, Red Deer public, and Elk Island are all say ing that the increases are much smaller than claimed and won’t allow them to hire more te achers or reduce c lass siz es, wha t actions w ill th e minister take to address these concerns? The Speaker: The hon. minister. Dr. Oberg: Thank you very much, Mr. Speaker. Just for the record I do want to put in what E dmonton public received. Edmonton public received a 5 per cent increase from last budget to this budget. They received $22 million more this budget over last budget.

When it comes to the interim funding that was put in in November, we added in another $7 million. In this budget alone – this budget alone – $16 million more went to Edmonton public. We have to recognize that Edmonton public is predict ing a dec line in t heir enrolment. They have $16 million more to spend for fewer students. The Speaker: The hon. leader.

Alberta Hansard May 5, 20041254 Dr. Pannu: Thank you, Mr. Speaker. To the same minister: what does the minister have to say to the trustees of Red Deer public when they state in a resolution adopted unanimously that the increase in next year ’s budg et wil l mak e it diff icult to m aintain ex isting programs and staffing, let alone implement the recommendations of the Learning Commission? The Speaker: The hon. minister. Dr. Oberg: Thank you ve ry much, Mr. Speaker. Assuming that there is no enrolment change in Red Deer public, their budget will have gone up 4.8 per cent last year to this year.

Their budget will have gone up about $2.6 million. Given that $1.1 million was given to them in November of this year, they will have $1.6 million on top of the $1.1 million to hire teachers, to do what that school board sees as their priorities. Red Deer public, for example, has decided that they will go to full-da y kindergarten, so they have put the ir funds into full-day kindergarten. They have gone up $2.6 million. On this side of the House $2.6 million is still a lot of money. Dr. Pannu : My fi nal supplem ental, Mr.

Spe aker, to t he same minister: how can the school boards honour the minist er’s own commitment and implement the Learning Commission’s recommen- dations by reducing class sizes when the budget increases they are getting will be barely enough to cover inflati on, let alone improve classroom conditions by reducing class size? Dr. Oberg: Mr. Speaker, the day when $250 million is not enough, the day when $250 million is just seen as a drop in the buc ket is a sad day for Alberta.

Two hundred and fifty million dollars, taxpay- ers’ dollars, is still a tr emendous amount of money , and that’s something that everyone in this Legislature needs to remember. Access to Motor Vehicle Information Database Mr. Lord: Mr. Speaker, my constituents and indeed many Albertans are very concerned about reports that the War Amps organization is going to be denied a ccess t o motor v ehicle inf ormation. M y questions are for the Minister of Government Services.

Could the minister infor m this As sembly w hat his depart ment is doing to ensure th at th e War A mps org anization is going to be able to continue their very worthwhile operations in Alberta? Mr. Coutts: Well, first of all, Mr. Speaker, let us say one thing. The War Amps organization is a very credible organization t hat really helps and assists young people not only in this province but across this great nation of ours with prostheses, and they do that by getting donations for the very valuable key tag service that they’ve provided for a number of years.

Charitable organizations have not been able to get access to the motor vehicle database, but about a year ago I met with War Amps, and they were able to convince me that they were a special case from the service that they provided. What we did a t that parti cular time was w e made a special exemption, which was basi cally a co mpromise, for War Am ps to gain access and retain access to the m otor vehicle dat abase fo r a period of two years.

They can take the names and the addresses of Albertans who have successful drivers’ licences and pe ople who would benefit from the key tag service that War Amps has, and they would be able to put that in their database for the next two years. As a matter of fact, we’re working today with War Amps on developing a form of consent. The form of consent would then be added to their database after the year 2006. We’re s taying within the privacy concerns of Albertans and protecting that. Mr. Speaker, War Amps has not been denied access to the motor vehicle database. Mr. Lord: Mr.

Speaker, again to the same minister : cou ld the minister explain w hy Im park and othe r private -sector pa rking companies will be allowed access to the motor vehicle information database? Mr. Coutts: Mr. Speaker, I want to clarify that Impark will continue to be denied a ccess to the driver information because of customer complaints, a nd an investigation continues into tho se customer complaints and the practices that Impark used in violating the Fair Trading Act.

Other private parking companies will be granted motor vehicle information only on the basis of implied consent, and that is by posting clear parking lot signage on the consequences of illegal parking. Names and addresses will only be released if – if – proof of payment is not displayed in accordance with the posted instruc- tions. These restrictions will ensure that consumers, customers who park in those lots, are clear on the terms and the conditions on the parking there. If the y agree to park ther e, they are conse nting to those consequences if they do not abide by those term s.

We w ill continue to audit private parking companies and to make sure that their requests for information comply with the terms of the contract. 2:00 Mr. Lord: My final ques tion, Mr . Spe aker, again for th e same minister. I’m wondering if he could explain to this Assembly what his department is doing to address concerns by private investigators who are als o concerned that they’ll be put out of business if they can’t access this database. Mr. Coutts: Mr.

Speaker, it’s no t only W ar Amps and not only private park ing companies and public parking companies that get this kind of information, but we’ re wor king with all sta keholders across this province to make this transition easier and to ensure that there’s compliance with these new , tougher re gulations tha t were asked for by the Privacy Commissioner and the Auditor General. Private investigators do a great deal of w ork for clients, such as banks and lawyers and insurance companies, and all they’ll need to do is get consent from their customers in the event that their motor vehicle information is needed.

That’s the operative word. We’re only going to give out information for purposes of that company to do business. Banks and insurance companies who hire private investigators will have to ensur e that the i nvestigator has been ap proved b y my department and licensed by the Alberta Solicitor General. We have made arrange ments t o release inform ation to the ba nk or to the insurance company for use by that i nvestigator working on their behalf. To conclude, these scenarios are as much of the information that is available and needed for the motor vehicle related incident or if it is needed for a court proceeding.

Automobile Insurance Reform (continued) Mr. MacDonald: Because this government would rather fly than drive, they are completely out of touch with Alberta drivers. The backgrounder released with last November’s announcement about auto insurance reform stated that “age, sex and marital status will no longer be factors in setting premiums.” My first question is to the Premier. Is it true that this g overnment is going t o break thi s commitment and will in fact allow discrimination to continue on the

May 5, 2004 Alberta Hansard 1255 basis of ag e, s ex, and marital status when setting auto insurance premiums? Mr. Klein: Mr. Speake r, quite the c ontrary. I’ll hav e the ho n. Minister of Finance respond. My directions and certainly caucus’s agreement were quite clear relative to the fundamental policy surrounding this issue, and that is that we want to end the discrimination for young good drivers who happen to be male and older male drivers. W e want to end that discrimination – that’s what the legislation is all about – and at the same time t o make sure that those w ho are injure d are fa irly compensated.

Mrs. Nelson: Well, Mr. Speaker, the only discrimination that will be brought into play in this new ref orm package, quite frankly, is the difference between a good driver and a bad driver. Then there will be discrimination. I f you’re a good driv er, you’re rewarded. If you’re a bad driver, you’re going to be penalized. Mr. MacDonald: Edmonton drivers are going to be discriminated against. Now to the Mi nister of Finance: is the g overnment planning on setting maximum base premiums so high that insurance companies will be able to continue to use all the discriminating factors they use now? Mrs. Nelson: Well, Mr.

Speaker, the actuarial assessment that has been in place for a long time has been based on regions within the province. Clea rly, under this package it has shown that there has been a difference between the rural communities and the two major centres. That has been based on experience, the driving experience and the claims experience, within those jurisdictions. As the major centres become more equal , thei r driving experience, we assum e, will follow suit, and we will see parity between them. Mr.

MacDonald: Again to the Premier: will the Premier admit that, yet again, this government’s auto insurance plan or their proposals will have so many loopholes that once it’s introduced, most Alberta drivers will be no better off than they are today, that in fact many will be worse off as a result of your tinkering with our auto insurance premiums? Mr. Klein: Mr. Speak er, again, I would remind the hon. member that they wouldn’t even have an issue had we not created the issue to address a serious problem that involved discrimination against young male good drivers and older male good drivers.

We want to end that discrimination. I can’t for the life of me see what they are upset about or why they are questioning these motives. These motives are good. You know, there’s always difficulty with regulations and to make them as tight and as firm as we possibly can. What we’re working through right now is the regulatory aspect of the legislation and the policy. Mr. Speaker, I don’t know; maybe the hon. member can answer this question. In areas where they do have state or socialist insur- ance, I don’t know if one area, Regina for instance, pays the same as a driver in Saskatoon. I don’t know that for sure.

Perhaps the hon. member can enlighten me, or maybe I’ll find it on the web, hope- fully. Maybe he can enlighten me too. I don’t know. Animal Disease Surveillance Mr. Snelgrove: Mr. Speaker, much attention has been given to the border opening for products from livestock under 30 months of age. Most producers are able to provide documentation as to the birthdate of their anim als, som e as ac curately as purebre d registr ation certificates, only to find that the 30-month age criteria is irrelevant and that the actual benchmark is the appearance of the animal’s third tooth.

Many animals develop this tooth as early as 24 months. My question is to the Minister of Agriculture, Food and Rural Develop- ment. Was the Alberta government involved in the determination of this criteria, and why do they continue to use the 30-month terminol- ogy? Mrs. McClellan: Mr. Speaker, the use of the third tooth t o deter- mine the appro ximate age of t he animal is an international agree- ment, part of animal disease surveillance. It is accepted internation- ally and endorsed in C anada by the Canadia n Food Inspection Agency, so directly we did not have any input into developing this.

However, we have accepted it as an international standard. One of the difficulties is that you have differing standards around the world. You have different ways of documenting age of animals, and this is seen as consistent. There’s a second method you can use, and it’s called ossification, but in that case the anim al has to be slaughtered or dead. Mr. Speaker, there’s no question that this tooth can va ry in its eruption in different ages of a nimal, bu t it is the most practical method we have. We call it denturing or mouthing of animals. It’s not new.

I just wa nt to point out to the hon. mem ber and to al l hon. members that there are two reasons that you use this. One is that under that age you do not have to remove the specified risk materi- als, so you wan t to kn ow the ag e of the animal because over 30 months there is a removal of SRMs. The s econd thing is that we cannot export the meat from an animal over 30 months, so we have to have a way of determining an age that is accepted by our interna- tional buyers. The Speaker: The hon. member. Mr. Snelgrove: Thank you, Mr. Spea ker.

T o the sam e minister: given that many producers find after the fact that their product has been hugely discounted by the pack ers under the premis e of the mature designation, even in cases where the meat is sold in Canada and grades triple A, what proc ess is a vailable to the produce rs to guarantee that the packing houses are not simply using the mature designation to rip off the producer and, ultimately, the consumer? Mrs. McClellan: Well, Mr.

Speaker, every producer that brings an animal into the market wants to mak e sure that they’re getting the most value out of that animal, but grade of that animal and dentition, or the third tooth, are not related in any way. Although it’s unlikely that you would get an over-30-month animal grading triple A, it is not that age that d etermines the grade of the carcass . The packer uses that, if they are a federally inspected packer, to do two things, as I indicate d.

They know the y can e xport that me at into the international marketplace, and they also know that they do not have to remove the specified risk materials. 2:10 Mr. Speaker, it’s important to understand that the seller and the buyer will det ermine what y ou get bac k. I m ean, if you take an animal in to ma rket and y ou’re dissatisfied with the g rade or the price, you take that up with the person who’s purchasing it.

But there is no question that some processors, especially large pack ers that are killing many a nimals a day, m ay char ge a prod ucer for bringing in an animal that’s over 30 months in a group because they

Alberta Hansard May 5, 20041256 have to segregate that animal, and there can be additional costs. Mr. Speaker, the grading of that carcass and the dentition w ork that’s done to determine the age of the animal for removal of SRMs or export are not related in any way. The Speaker: The hon. member? The hon. Membe r for Edm onton-Mill Woods, f ollowed by the hon. Member for Calgary-Cross. Education Funding (continued) Dr. Massey: Thank you, Mr. Spea ker.

For m any school boards there will be no reduction in class sizes and there’ll be no progress on the Learning Commission recommendations with respect to class size this September. In fact, in some urban and suburba n districts class size will likely increase. My quest ions are to the Minister of Learning. How much money was allocated in the budget specifically for the commission’s class size recommendations? Dr. Oberg: Mr. Speake r, this is dé jà vu all o ver ag ain.

In the Commission on Learning there were two issues that were looked at, and, as I’ve said in this House before, they were essentially contra- dicting ideas. One idea was the whole issue of class size where they put in class size numbers that we have agreed to. What they said on the second side of things is that w e should instit ute the f unding formula. The funding fo rmula gi ves th e school boar ds the ultim ate flexibility. In all fairness, the school boards have the ability to use 95 per cent of the dollars that they will receive as they see fit.

There is 5 per cent that is left over that is targeted for the Alberta initiative for school improvement, the SuperNet, and student health. Mr. Speaker, in direct response to the hon. member’s question, as you can t ell by my explanation, there was no money that wa s put directly to class size. There was, howeve r, $25 0 million that was given to schools, ba sic K to 12 e ducation. Of that, $192 m illion went directly to school boar ds.

The majorit y of t he other $58 million went f or increas es in tea chers’ pensions, and the second thing was inc reases to the curri culum, w here we ’re working on bigger and better curriculums. So in direct response to that, there has been the potential for $192 million to go to class size if that’s the school board’s priority. The Speaker: The hon. member. Dr. Massey: Thank you, Mr. Speaker. That’s absolutely wrong. The question is to the minister.

Given salary grid cost increases close to 2 per cent, inflation, and the arbitrated settlement, how with an average 5 per cent increase does the government expect urban and suburban school boards to begin reducing class sizes? Dr. Oberg: This is quite unbel ievable. A 5 per cent increase in education in Al berta i s not heard of anywhere else in Canada. British Columbia: zero – zero – per cent for three years. Saskatche- wan: probably l ooking at a decreas e in e ducation funding. Mr. Speaker, in this province our government gave $250 million to the K to 12 education system, which is an absolutely huge amount.

Not only did we give $250 million; we have budgeted $650 million over three years for the basic K to 12 education system. The Speaker: The hon. member. Dr. Massey: Thank you, Mr. Speaker. If the money is adequate, why has this minister in this letter made a crude attempt to muzzle school boards should they speak out on this issue? Dr. Oberg: Mr. Speake r, I’m not aware of wha t l etter the hon. member was talking about. I would assume that it is a let ter that went to school boards clarifying the actual amount of dollars that they received, and I will give you an example. In the Assembly this week the hon.

Mem ber for Red Deer-West, I believe – Red Deer- North; directions were never my strong point – asked me a specific question about this, a nd what th e school board had done is stated that, yes, there w as $330,000 or ther eabouts pu t into a boriginal education. There was another $230,000 or $240,000 that w as put into special-needs education. Mr. Speaker , what the school board forgot to say is that those funds are flexible. There is nothing tied to those funds. In essence, they can use t hose funds however they see fit, and that’s what we expect school boards to do. Global Telehealth Technology Mrs. Fritz: Mr.

Speaker, health care is being reformed already by rapid changes in telecommunications. I understand that a respect- able hospital in Boston is sending its X-rays and radiological films to India for reading and diagnosis. I also understand that that cost is app roximately $10 U .S. in India a s compared to $150 U.S. i n Boston to read tha t same film . Appare ntly, this saves not only money but time fo r the patie nt. So my question today is for the minister of health.

Is your department giving consideration to using telecommunication to access services outside of Canada for radiolog- ical diagnosis in order to save time and cost in patient care? Mr. Mar: Mr. Speaker, Alberta’s health system already does make effective and efficient use of information technology in sending and reading radiology images from remote locations. We have one of the most extensive telehealth systems in the world.

We have some 25 teleradiology sites here in the province, and through that, we are able to send X-rays and ultraso unds an d other diag nostic images from remote locations in the province for reading in major centres such as here in the city of Edmonton or in the city of Calgary. Mr. Speaker, we do not send any of these out of province at this time, but I think that in looking at the applications, the hon. member raises an issue that ought to be looked at.

I think that the key issue, though, is that we must ensure that the standard of care, in this case the standards of reading films or X -rays, would hav e to be m ain- tained. I’m not f amiliar enough w ith wha t the results of those readings would be in other jurisdictions. I’ve tried my best to verify the place where this practice takes place. I’ve been advised of it, but I cannot confirm which facility in Massachusetts is using this, no r can I confirm the price differential between the reading of films in Boston versus reading them in another jurisdiction. The Speaker: The hon. member. Mrs.

Fritz: Thank you, Mr. Speak er. Further to that, then, I’m wondering if the minister’s department is using health care providers outside of Canada for any patient services. Mr. Mar: Mr. Speaker, we do spend a small amount of money in seeking services that are not available here in Alberta and in some cases not available in Canada. There are certain lab results that are very sophisticated that we do not have the volumes with which we can do them here in this province. Certain genetic tests, for example, we do send out of country to the United States. The total cost of that is in the magnitude of $100,000.

May 5, 2004 Alberta Hansard 1257 We do send Al bertans out of provi nce to other parts of Canada sometimes when we don’t have a particular service here in Alberta. Last year, Mr. Speak er, we spent $ 4.3 million on out-of-country hospital care, mostly in the United States, although on occasion we do send people to jurisdictions other than the U.S. So the answer is yes. We do rely upon out-of-country services, practitioners. We always need to satisfy ourselves that the service is not available in Alberta and that it is of a reco gnized hig h-quality calibre of service. The Speaker: The hon. member. Mrs.

Fritz: Thank you, Mr. S peaker. My final supplemental is to the same minister. Does your department or any of the RHAs have policies in place to ensure – and not just to consider but to ensure – that Canadian standards are met when buying patient services in a global market where the costs are lower? 2:20 Mr. Mar: Mr. Speaker, I think it is of primary consideration that we maintain very high standards i n our delivery of service . So if a service is available through some other means that is less expensive, we would not do that at the cost of decreased quality of service. Calgary Ring Road Mr. Bonner: Mr.

Speaker, on more than one occasion the Premier has suggested that tolls might be implemented to cover the cost of the future sou thwest leg of th e Calga ry ring road. The Alberta Transportation news re lease, however, makes no m ention of a ny tolls. My questions today are to the Minister of Transportation. Can Calgarians look forw ard to pay ing a toll on a future so uthwest Calgary ring road? Mr. Stelm ach: Mr.

Spea ker, the hon. me mber is refer ring to a question that came from the media at the signing of the agreement in principle that will eventually transfer land from Tsuu T’ina nation to the Crown of Alberta for the purpose of a ring road. The question was: will this road be tolled? The reply by the Premier was: we’re looking at all kinds of options. There are some policies tied to tolls, and with a toll you must have an alternate route. If you are going to toll a new road, you must have another road that provides the same type of service. That was further to the Premier’s comments at that particular time. Mr.

Bonner: To the sa me minister, Mr. Speaker: given t hat this ministry is consider ing implementing tolls for this r ing road, is it also considering making this a P3 project? Mr. Stelmach: Mr. Speaker, in this Assembly I did mention that if our inaugural project, being the southeast leg of the Anthony Henday in t he city of Edmonton, w orks we ll, if it brings sa vings to t he provincial taxpayer, we will certainly look at that option for further development of the ring roads in Alberta. Mr.

Bonner: To the same minister: has the government shifted its policy on tolls, and will it now begin to implement tolls on new highways constructed in the province? Mr. Stelm ach: Mr. Speaker, no. There have been no policy changes. We always had a policy, as long as I was minister of this department, that tolls could not be implemented unless there was an alternate route. Also, tolls on roads don’t particularly work in every instance and every application. There has to be a significant amount of traffic on that particular road to pay for the construction and the maintenance of that road in the future.

I don’t know how much traffic will be in the southwest, but on the other roads that we’re looking at in terms of the ring road, we’d probably only cover about a third of the cost, and then once y ou subtract t he col lection costs, it de creases the revenue even further. The Speaker: The hon. Member for Edmonton-Highlands, followed by the hon. Member for Peace River. Health Care Reform Mr. Mason: Thank you very much, Mr. Speaker.

As set out in an Ottawa speech by the Minister of Health and Wellness yesterday, the Tory government’s vision is a bleak one of a stripped-down public health care system that only protects Albertans against catastrophic health costs. T his is t he very opposite of our national vision of a comprehensive public health insurance system that covers all health services. Far from being a Cadillac, this government’s vision is one of an old beater sitting up on blocks in the yard. My question is to the Minister of Health and Wellness.

Why is the minister outlining a vision of health reform that, far from being the original vision of medicare, takes us back to the bad old days before medicare? Mr. Mar: Mr. Speaker, I wish to correct the hon. member on most if not all of the content of his

preamble. The reality is that w hen medicare was f irst introduce d in t he province of Saskatc hewan, Tommy Douglas – an d I kn ow tha t he has re ad extens ively on matters that Premier Douglas had spoken about – contemplated that medicare would be about hospital care and physician care. I don’t want anybody to be left with the impression that the hon. member would leave, that we’re trying to strip down medicare to its bare basics, but we do have to return to what its original roots were and what the original principles were.

The reality is that many of the things that we do in the health care system today could never have been contemplated by the founders of medicare 40 years ago. There are things that we can do today that were not even available five or 10 years ago. Our point as a government is that we need to reform our system because it’s not sustai nable. There are those who will say that it’s sustainable because expressed as a pe rcentage of gr oss dome stic product, it hasn’t really changed. Well, gross domestic product isn’t like money in the bank that you can spend; revenue is. Mr.

Speaker, here is the stark reality across Canada: 8 to 10 per cent is how much health care has been increasing in provinces across this country each year for the last 10 years. Revenues over the same period of time have grown 2 to 4 per cent. So something has got to give. That’s why it’s not just the provincial government of Alberta that’s interested in reform of the health care system. It’s the reason why a New Democrat government in Saskatchewan would commis- sion Ken Fyke to do a report for them. It’s the reason why the Claire report was produced in the province of Quebec.

It’s w hy similar reports have been done in British Columbia and Atlantic Canada. Mr. Speaker, we’re doing our ve ry, very best to ensure that we remain true to the or iginal principles set out in m edicare and still reform the system. We don’t deliver health care the same way that we did 40 years ago. Our public policy and the structures in which we deliver it must therefore change. It must keep pace with medical technology and drugs and other things that are being done today that were never even contemplated 40 years ago.

Alberta Hansard May 5, 20041258 The Speaker: The hon. member. Mr. Mason: Thank you very much, Mr. Speaker. Well, given that the minister’s speech says, “It will be a system that pr ovides core services in the original spirit of medicare,” will the m inister now define for this House very broadly w hat core service s he has in mind? Mr. Mar: Mr. Speaker, that is the subject matter of our discussions right now in preparing a docume nt that we can place before t he Alberta public before the end of June. That’s been the commitment of the Premier of this province and ours.

I think that looking at how services are delive red in other juris dictions w ill provide us with some demonstration of how things might be different and how they can change effectively. I think that the hon. member would be well served to learn about health care systems in other parts of the world, and I think that one of the great difficulties is that he and other people like his supporters would only look to the U nited States and say: our choices are the United States or Canada. Our choices are not nearly so stark. We have a broad range of choices.

So we will look at other health care systems throughout the world, and we will come back with the best solutions that we can find that would be applicable to Alberta within the spirit and the principles of the Canada Health Act and its original principles. The Speaker: The hon. member. Mr. Mason: Thank you very much, Mr. Speaker. Well, given that the minister’s speech says, “No one should face financial hardship because of catastrophic illness or injury,” can the minister tell the House just when people should face financial hardship in our health care system? Mr. Mar: Mr.

Speaker, I think it’s very rare that an NDP member of the Legislatu re would q uote a Con servative mi nister of health. But I think the principle would be well understood by most Alber- tans that there should not be catast rophic health suffered by an individual that results in a catastrophic financi al burden. That ’s exactly what To mmy Dougl as talk ed about on the f loor of the Saskatchewan Legislature in 1961. I doubt if a nybody asked Mr. Douglas at that time: what does that mea n? I think it’ s well understood, the driving force of the princi ple. I think that’s understood well by Albertans.

The Speaker: Hon. members, in a f ew seconds from now I’ll call upon the first of seven hon. members to participate in Recognitions. Hon. members, might we revert briefly to Introduction of Guests? [Unanimous consent granted] head: 2:30 Introduction of G uests (reversion) The Speaker: The hon. Deputy Speaker. Mr. Ta nnas: Thank y ou, Mr. Speak er. I’m pleased t oday to introduce to you and t hrough you to members of the Assembly 36 participants in the Forum for Young Albertans. They are accompa- nied today by Tanya Dyer, Erin Smith, Richard Fix, Aurthur Lee, and Selena Craig.

These fine young people come from a number of high schools ac ross Albe rta and ar e spending t he wee k learning about the Leg islature, the inner w orkings of the gove rnment, an d will participate in a model parliament. Many of our members have met with these students, which has offered both parties an excellent opportunity to discuss the traditions and procedures of this Assembly and the role of the MLA. I would ask that our honoured guests, who are seated in the members’ gallery, do rise and receive the traditional warm welcome of this Assembly. head: Recognit ions The Speaker: The hon.

Member for Vermilion-Lloydminster. Robert Dixon Mr. Snelgrove: Thank you, Mr. Speaker. I would like to recognize today a very special young man from my constituency, Mr. Robert Dixon from Mannville, who was named this year’s recipient of the 4-H Premier’s award. He was selected out of 129 candidates during the annual 4-H selections program held in Olds last weekend. Mr. Speaker , the Prem ier’s award is the highest honour t he Alberta 4-H program bestows on a member.

The award recognizes young Alberta ns that dem onstrate s trong p roject m anagement, leadership, and comm unication skills plus dedica tion to their community. Robert embodies all of the above-mentioned traits and most certainly exemplifies the can-do spirit of 4-H. I’m extremely proud that this talented young man will be representing our province and our 4-H program as he travels to numerous eve nts across A lberta during the next 12 months. As the Premier’s award winner Robert also takes on the role of 4- H ambassador.

He will be j oined by 13 4-H’ers who were also chosen during the s elections weekend based on t heir l eadership skills, their enthusiasm and commitment to their communities and rural Alberta. A great deal of credit should be awarded to his mother, Barbara. As well, this achievement w ill al so rekindle with fondne ss the memory of his late father, Bruce Dixon, himself an accomplished 4- H’er. Please join me in congratulating Robert and all of the ambassadors and young 4-H members on their wonderful achievements. The Speaker: The hon. Member for Whitecourt-Ste. Anne. Liberation of Holland by Canadian Soldiers Mr.

VanderBurg: Thank you, Mr. Speaker. Today marks a very special anniversary for both the Member for Edmonton-Manning and for me. Fifty-nine years ago today Canadian soldiers liberated my family and mil lions of other Dutch citizens from the Germ an occupation in Holland. Also on that date members of my family that were incarcerated in German work camps were freed and started their journey back to the Netherlands. Mr. Speaker, the Dutch people both here in C anada and in the Netherlands have not forgotten this historic day and the Canadian soldiers who freed them.

Growin g up as the so n of D utch immi- grants, I learned at a very early age the importance of May 5, 1945. My parents would proudly fly both the Dutch and the Canadian flags to remind the people in Whitecourt that the VanderBurg household had not forgotten. Thank you. D-Day Commemoration The Speaker: Hon. members, on that note just given by the h on. Member for Whit ecourt-Ste. Anne, in the next fe w days all hon. members of the Assembly will receive an invitation from me about a very, very significant and major event that we will hav e on the

May 5, 2004 Alberta Hansard 1259 grounds of the Legislature on June 6 of this year. That will be the 60th anniversary of the D-Day landings, and we’re inviting as many of the veterans who actually participated in that landing on June 6, 1944, to be present. We will have a flyover with F-18s and helicop- ters and the whole thing, and it will be a huge, huge event. So when you get the memo, please read it. The hon. Member for Wetaskiwin-Camrose. United Farmers of Alberta Mr. Johnson: Thank you, Mr. Speaker.

I rise today to recognize the United Farmers of Alberta, who recently opened a brand new 18,000 square foot state-of-the-art facility in Cam rose. Designed to be a one-stop shopping facility for area farmers and ranchers, this new store reaffirms UFA’s commitment to rural communities not only in my constituency but throughout Alberta. Since 1909 the UFA has helped build this province, advocating for farmers and rural Alberta through its influence on provincial politics, and its stamp on Alberta remains to this day.

In the early years of Alberta the UFA was integral in campaigning for the rights of the family and equality for women. As well, they took up the challenge of promoting equal access to education and health care for rural communities, and be cause of their efforts the province of Alberta created a department of health and a system of public health nurses to help deal with rural health issues. Currently the UFA is travelling around the province with a history in motion display reminding Albertans about the 95-year history of the UFA in action.

The launch of this display occurred in Camrose at the opening of their new regional service facilities. Thank you. The Speaker: The hon. Member for Edmonton-Centre. International Midwives Day Ms Blakeman: Thank you, Mr. Speaker. Today I rise in recognition of the 14th annua l Interna tional Midwives Day. The concept of having a day to honour midwives was born at the 1987 International Confederation of Midwives conference in the Netherlands, and the first International Midwives Day was celebrated on May 5, 1991. It is now observed in more than 50 countries.

Unfortunately, I make this recognition in support of fewer midwives in Alberta each year. This is due mainly, I think, to a lack of funding. A decade ago the Alberta Association of Midwives had 150 membe rs wh o wer e ho ping th at mi dwifery would become publicly funded. The profession lost some mem bers when official registration of midwives began in 1998 and additional government fees added to their costs. More midwives have been driven away by the continuing lack of coverage under Alberta health care.

B.C., Ontario, Quebec, and Manitoba all publicly fund midwifery services under their h ealth care plans, and Alberta must consider going this route, especially in light of a severe shortage of obstetrical doctors in Alberta. My congratulations to those midwives who continue to practise. Thank you. The Speaker: The hon. Member for Edmonton-Glenora. Hope Foundation of Alberta Mr. Hutto n: Thank y ou very much, Mr. Speaker . I had th e privilege of atte nding the Hope Foundation aucti on gala this past weekend.

This year’s event rai sed funds fo r the Hope Kids, that provides personal growth for individuals, families, and professional caregivers. I want to recognize the honorary chair of the event, our Minister of Children’s Services, who was auctioned off for a considerable amount of money. I’d also like to ackn owledge the Ministe r of Health and Wellness, who performed at the event as Elvis and Don Ho. It was a Hawaiian event, Mr.

Speaker, and I participated in the live auction and had the s hirt o ff my ba ck auctioned, and this l ovely Hawaiian shirt was pu rchased by Dennis Erker from FE A dvisory Group with the caveat that I wear it in the House today. So, Dennis, here it is. Thank you and congratulations to the Hope Foundation. Thank you, Mr. Speaker. The Speaker: Well, I appreciate that explanation because I thought it was the Hutton tartan. The hon. Member for Edmonton-Castle Downs. Mr. Lukaszuk: How do I follow that? European Union Mr. Lukaszuk: Mr.

Speaker, this past weekend Hungary, Poland, Czech Republic, Slov akia, Slov enia, Estonia, Lithuania, Latvia, Malta, and Cypr us joined the E uropean Uni on. These s tates of central E urope and Medit erranean countries joi ned 15 exist ing members to make the EU on e of the strongest trading uni ts in the world. Membership in t he European Union inspires political stability, economic openness, and fiscal resp onsibility. The ex panded EU helps the countries gain a stronger economic footing to compete in the global economy.

The expansion also creates the largest internal market, accounting for some 450 million citizens and based on a single set of trade rules and an open economy with a high stan dard of rule s. The EU negotiates major trade and aid agreements with other countries while at the same time allowing free transfer of goods and f reedom to provide services among the member countries. Alberta’s Minister of Economic Development is always looking for new and emerging markets throughout the world.

Alberta should be prominently featured in the expanded EU to take advantage of business opportunities and importing and exporting agreements. Thank you. The Speaker: The hon. Member for Edmonton-Gold Bar. Code of Silence Award Mr. MacDonald: Thank you, Mr. Speaker. I rise today to recognize and congratulate this government for being one of five finalists for the code of silence award. This aw ard recognizes only the most secretive governments and government agencies in Canada, and I’m sure the Albe rta government feels th at it is a n honour just to be nominated.

The government won this distinction by the way it handled a FOIP request related to the Stockwell Day lawsuit. When Justice McMah- on ruled on the matter he stated, “Access to information legislation is a mea ns by w hich people g et that i nformation from sometimes reluctant government hands.” He also said, “The right of the people to require that governmen t accou nt to them is fundam ental to a strong democracy.” In conclusion, I’d like to say to the Premier and his government: congratulations for being nominated for this great honour, and best of luck winning the code of silence award on Saturday.

First prize will not be a surprise.

Alberta Hansard May 5, 20041260 head: 2:40 Present ing Pet itions The Speaker: The hon. Member for Edmonton-Strathcona. Dr. Pannu: Thank you, Mr. Speaker.

I have a petition here that I’d like to prese nt signed by 80 Albertan s petitioning the Legislative Assembly to urge the government of Alberta to not rescind the tax exempt st atus of Alberta Blu e Cross because such taxing will significantly increase the premiums of the Cana- dian National Railways Pensioners’ Group Health Benefit Plan and will h ave an ad verse ef fect o n all A lberta Seni ors be cause t he Alberta Seni ors’ Benefit wh ich is administ ered by A lberta Blue Cross will be faced with increased costs. Thank you, Mr. Speaker. head: Tabling R eturns and R eports The Speaker: The hon.

Member for Edmonton-Castle Downs. Mr. Lukaszuk: Thank you very much, Mr. S peaker. I hav e two tablings this aftern oon. Fir st of al l, I wo uld l ike to tabl e the appropriate number of copies of a letter sent by David Lock, Blood Tribe deputy chief, Inspector Graham Abela from the Taber Police Service, and Chief Marshall C halmers, preside nt of the A lberta Association of Chiefs of Po lice. Each o f t he letters expresses support from these associations for Bill 204, the Blood Samples Act. Mr.

Speaker, my second tabling is a letter from Michael Rennich, chair of the A lberta Union of Provincia l E mployees local 003, representing correctional officers and correctional service workers. The letter talks about the need for legislation requirin g persons in custody who have assaulted police officers or correct ional officers to submit blood samples. The letter also states that the union local supports the bill. Thank you. The Speaker: The hon. Member for Edmonton-Mill Woods. Dr. Massey: Thank you, Mr. Speaker.

I would table the required number of copies of a le tter from the Mini ster of Learning to the chair of the Red Deer public school board and copied to a variety of educational organizations across the province chastising that board for going public with its financial concerns. The Speaker: The hon. Member for Edmonton-Strathcona. Dr. Pannu: Thank you, Mr. Speaker.

I rise to table the appropriate number of copies of a n Edmonton sc hool board publica tion, a document called KeyNotes, showing that the board was disheartened to learn that i t would no t receive any pr ovincial funding for the construction of new schools. Thank you, Mr. Speaker. head: Orders of t he Day head : Co mmit tee o f Sup ply [Mr.

Shariff in the chair] The Dep uty Chair: Hon. members, we ’ll call t he committee to order. head: Main Est imate s 2004-05 Infrastructure The Deputy Chair: As per our Standing Orders the first hour will be dedicated between the hon. minister and members of the opposi- tion, following which any other member may participate. The hon. Minister of Infrastructure. Mr. Lund: Thank you, Mr. Chairman.

Before I begin, I would like to introduce st aff t hat we ha ve in the g allery, starting with my executive assistant, Jeff Paruk; then the assistant deputy minister in charge of capital projects, Malcolm Johnson; our director of finance, Jim Bauer; and the communications director, Mark Cooper. Infrastructure’s three-year busines s plan and the 2004-05 e sti- mates indicate how we plan to contribute to the delivery of govern- ment programs by carrying out our core businesses.

I know that all of you are very familiar with the responsibilities of Alberta Infr a- structure, so I thought I would just give you a very high-level overview of our core businesses.

Infrastructure’s core res ponsibilities are, one, t o provide policy direction, planning, and expertise and capital funding for schools, postsecondary institutions, health care facilities, and seniors’ lodges; two, administer the school plan t op erations and maintenance funding; three, build a nd maintain nearly 2,200 owned and leased facilities that support g overnment operations, including the Swan Hills treatment plant; four, to provide accommodation, leasing, and realty services for government; five, manage the government’s air transportation and vehicle fleets; and six, administer the natural gas rebate program.

Before I get into the specifics of our ’04-05 estimates, I would like to outline the new and ongoing capital initiatives. The capital plan for Alberta Infrastructure will see levels reaching $2.64 billion over the next three years in areas such as health, school, and postsecond- ary facilities as w ell as num erous cent ennial projects to ce lebrate Alberta’s centennial year. Of that amount, $1 billion of spending will occur during the ’04-05 fiscal year. The following will highlight areas of spending from the perspective of the capital plan as well as the business plan. [Mr.

VanderBurg in the chair] First of all, healt h facilities . New funding of $71 million f or health facilities has been allocated in ’04-05 to begin new projects such as the e xpansion of the main buildi ng, redevelopment of the emergency department and the i ntensive care unit a t the Foothills hospital in Calgary. In addition to funding for upgrades, new space in the Capital health region will accommodate 170 new acute care beds. In ’04-05 $273.1 million has also been allocated to continue work on 52 major health facility capital projects across the province.

These include such projects as the redevelopment of the Royal Alexandra hospital in Edmonton, the Children’s hospital in Calgary as well as a large number of ongoing maintenance projects. School fa cilities. New f unding of $42.2 m illion for s chool facilities has been allocated in ’04-05 to begin 17 new projects such as school replacements in Onoway, Drayton Valley, and Peace River and new schools in Calgary.

In ad dition, $178.6 million has been allocated in ’04-05 to continu e work on 647 major sch ool facility capital and maintenance projects in communities throughout Alberta which were previously approved in the capital plan. Postsecondary facili ties. New funding of $53 mi llion for postsecondary facilities has been a llocated in ’04-05 to begin new capital projects t o accommodate major new programs such as th e Augustana/University of Albe rta me rger in Ca mrose, the NAI T apprenticeship project in Edmonton and Grande P rairie, and the University of Calgary bachelor of science project.

In addition, some $161.8 million has been allocated in ’04-05 to continue work on major postsecondary project s such as the health

May 5, 2004 Alberta Hansard 1261 research and innovation centres at the University of Alberta and the University of Calgary and the natural resources engineering facility in Edmonton and many other maintenance projects. Now I’d like to share with you the sp ecifics of our ’04-05 estimates, $1.6 billion targeted for ’04-05.

Alberta Infrastructure’s total budget incr eases by 29 per cent, from $1.25 billion to over $1.61 billion, enhanc ing funding for Al berta’s new and ag ing infrastructure. 2:50 Of the $1.61 billion, $1.54 billion was allocated to our operations and equipment and inventory purchases budget with the balance of $73.5 million going to capital investment; $598 million is for lights- on costs and includes caretaking, grounds maintenance, utilities, and routine repairs. [interjections] Right; lots of money. Of the $598 million, $349.5 million will support the da y-to-day facilities operations of som e 1,470 schools.

To kee p more tha n 1,900 government-owned buildings open, $125.8 million; lease funding of some $101 mill ion for 1,766 leases to accom modate government programs in 290 lease d facili ties; $21.6 m illion to continue the operation of the Swan Hills treatment plant.

The budget for preserving infrastructure across the province i s some $298.3 million, of whic h $107.7 m illion is f or preserv ing health care facilities , $123.1 million f or school f acilities, $38.8 million for postsecondary facilities, and $21 million for government facilities, with the balance of $7.7 million going to seniors’ lodges and environmental services for site remediation and servicing.

To expand, replace, or add to the existing infrastructure, we have some $527.6 million, of which $236.5 million is allocated for health care facilities expansion, $97.7 million f or school f acilities, $176 million for postsecondary facilities, $12.5 million going to centen- nial legacy grants – the legacy grants program will provide funding for municipalities and not-for-profit groups who wish to undertake major public acces sible capi tal projec ts in com memoration of Alberta’s 100th anniversary – with the balance of $4.9 million going to government facilities and the land services program.

The remainder of the operating budget is going to address ongoing commitments which total some 108.2 million dollars. The ongoing commitments include the day-to-day administration costs, program support costs, and noncash items such as amortization and consump- tion of inventories. Fifty-five per cent of the $60 mill ion is for noncash items such as amortization and consumption of inventories, with the balance designated for support services and air and vehicle transport services.

The equipment and inventory budget of some 4.9 million dollars will go towards purchases of the Swan Hills treatment plant as well as vehicle and air transportation services. The capital i nvestment portion of our budget is approximately $73.5 million. Of this amount, $63 million will go towards funding such projects as the level 3 biocontainment lab, the Leduc business incubator facility, the refurbishing of the north and south Jubilee auditoria, as well as the many centennial projects that are planned or underway.

The rem aining $10 m illion will primarily be us ed to purchase land required for the transportation and utilities corridor. I believe that the budg et estimates for this year will allow us to meet our business plan’s goals and help maintain the government’s commitment to financial responsibility. So I would be happy to take questions that you may have. If we ca n’t answer them t his after- noon, we wil l get you the answ ers in writing in the near future. Thank you. The Acting Chair: The Member for Edmonton-Glengarry. Mr. Bonner: Thank you, Mr. Ch airman.

I’d like to s tart off by thanking the minister and his staff for being here today and for their input into the debate on Infrastructure and also thanking the minister for his opening comments. I look forward to his responses. If some of the questions are technical in nat ure, require further time, if he would provide those answers in a w ritten form and ans wer those questions that he has the information here today.

In looking at the core bu siness secti on of Infr astructure and particularly as the m inister outlined them tod ay, core business 1, “Partner with health regions, school boards, post -secondary institutions and seniors’ lodge foundations to support the delivery of government programs.” Now, in goal 1, “Provide leadership and funding for the development and preservation of health care facilities and the preserva tion of s eniors’ lodges,” I notice that one of the words here that is extremely important to me is the “funding.” When we go to goal 2 in core bus iness plan 1, we go on to say, “Provide leadership to preserve and deliver effective and efficient facilities in support of life-long learning.” Now, no mention in here of funding f or f acilities in s upport o f lifelo ng lea rning.

So my question to the mi nister would be: is this a significant shift from what we’ve enjoyed in this province since 1905 w hen it comes to government funding of pub lic schools , or does the delivery of “effective and efficient facilities in support of life-long learning” also include the funding for the building of those facilities? That was one thing that caug ht my eye j ust as y ou were outlining your core business section. As well, Mr .

Chairm an, we ha ve in this province so mewhere between a $6 bi llion to $9 billion inf rastructure deficit, and this indicates that there are already many serious infrastructure issues in Alberta that highlight the steep price to be paid for not addressing repair, rehabilitation, and replacement of existing infrastructure, let alone addressing the needs that this province has for its rapid growth and the growth that we expect to have in the future. The Canadian Society for Civ il Engineering through t heir technology road map project estimates that municipal infrastructure in Canada is a $1.6 trillion asset.

So in order to protect our infrastructure assets here in the province of Alberta, I’m wondering: what additional price do Alberta taxpayers have to pay for neglecting our assets over the past decade? The minister in his opening comments indicat ed that Albe rta’s infrastructure budget is i ncreasing by 6.6 per cent to ove r $1.6 billion in 2004-2005. The minister’s capital investment in 2004 - 2005 will be $205 million, an increase of $142 million over 2003- 2004. The highlights include funding of $598 million for operations, $298 million for preservation, and $528 million for expansion.

In looking at page 223, ope rating expense and equip- ment/inventory pur chases, the m inistry support serv ices rose by almost $975,000 over 2003-20 04. If the minister could please indicate what reasons there were for these increases to occur. When we look at infra structure operations, pr eservation, and expansion, it rose by over $93.5 million. Which projects will thi s money be going toward?

Given that in 2003-2004 the ministry was over budget by $232 million in this area, can the minister indicate reasons why this will not happen again in 2004-2005? 3:00 Meanwhile, equipment/inventory purchases for infras tructure operations, preservation, and expansion have gone down by almost $16 million. What was the reason for overspending in 2003-2004, and if the r eason for thi s is because of the use of P3s, how much more is it costing them in the questions above? The capital invest- ment in infrastructure operations, preservation, and expansion has risen by over $32 million.

What projects will these additional funds be going toward? In program 1, ministry support services, the operating expenses for

Alberta Hansard May 5, 20041262 the minister’s office rose by $5,00 0, while t hose for t he deputy minister’s office rose by $11,000. Could the minister please indicate why these additional funds were required? The operating expenses for strategic services rose by $79,000. Again, if the minister could please outline why these additional dollars were required. The operating expenses for information management also rose by $809,000. If he could pleas e indicate why there was s uch a great increase in the operating expenses for information management.

The operating expenses for shared support serv ices rose by $71,000. I f the m inister could please out line to us: w hat are the shared support services, and why the increase? As well, why were there information management expenses in 2003-2004 related to equipment/inventory purch ases and none for 2004-2005? Program 2, infrastructure operations, preservation, and expansion. Why have the infrastructure expansion expenses for seniors’ lodges decreased by almost $3 million given the aging demographics of our population?

It would seem that as we have an increase in aging in the demographics of our population, we w ould require m ore expansion of what is presently there. As well, if the m inister could please i ndicate why there are no operating expense s for ene rgy r ebates in 2004-2005? Has t he program ended? Will there not be any more energy rebates? Just what has happened to that program, please? The exp enses for program service s have increased by over $600,000. Once again, if the minister could please outline why there is an increase of $600,000 for program services.

Why have expenses for the amortization of financial transactions increased by over $2 million in this particular reporting period? I would have ex pected that as we pay dow n the am ortization on various projects, this would be an area where we would expect this particular amortization to be less. As well, with the fact that interest rates have been relatively stable over the past year, why would there be an increase and not a decrease? Also, if the minister could outline which capital and accommoda- tion projects account for the over $24 million increase in infrastruc- ture capital investment in 2004-2005.

As well, if the minister could please indicate why the capita l investm ent for la nd servic es is decreasing by over $10 million in 2004-2005. When we loo k at the statutory program, it indicates that almost $127 million in capital investment has been earmarked for alterna- tively financed projects when this method of financing hasn’t even been proven to be cost-effective to the taxpayers.

We can talk more about this as we go along, but I think the prime example of why this is such a great concern to us i s the fact t hat, initial ly, when the Calgary courthouse was announced, it started out to be a project that was going to be in the $170 million range. Under capital projects in the province, which was put out by the Ministry of Eco nomic Development as late a s March 31, 2004, it indicated that the cost of the new courthouse was going to be $170 million.

Then we saw that the cost of the courthouse had increased to $300 million, and then in the latest estimates this has soared to approximately half a billion dollars. So, again, there is great concern in the province over the cost-effectiveness for alternatively financed projects. I will g et into that a little bit m ore, but this pa rticular question refers to the $127 m illion in capi tal inves tment that h as been earmarked for alternatively financed projects. If the minister could also indicate why there are no specifics on these projects such as what they are and how they’ve proved to be cost-effective.

Again, we want to ge t away from t his whole attitude that a P3 is sim ply nothing more than a credit card where government charges today and taxpayers pay over the next 30 years. It is a question that continues to bear heavy certainly on the minds of Alberta taxpayers, who are looking at having to pay for these projects over the next 30 years.

As well, what Albertans are very, very concerned about with P3 projects, particularly if we’re looking at the P3 model to build the southwest Calgary hospital, is: what guarantees of service are going to be provided to the patients in those hospit als, particularly as we move down the road and the cost s of t he hospital increase as they have under whatever model we use, to ensure that there’s going to be a leve l of ser vice in tha t hospital a nd that that s ervice to the patients will not be compromised to keep the profit m argins of the private provider in place?

Again, people are very concerned about the quality of the services that will continue over the life of a P3. I also would like to as k the m inister a question reg arding th e change in capit al assets. New capital investm ent in centennial projects has increased by over $20 million. Which projects will this money be going toward? 3:10 [Mr. Shariff in the chair] In the 2004-2007 Inf rastructure business pl an the mis sion is “Through lea dership and technical expertise, provide effective, efficient, innovative and timely infrastructure and services.” This comes from page 278.

Alberta Infrastructure’s vision is also to provide Albertans with “innovative, quality, and sustainable public facilities.” Of cours e, with our current situation where we have a huge infrastructure debt, the ministry isn’t there yet. Students at Bow Valley high school in Cochrane have had to go without water and sewer facilities for over four years now. That and a number of other safety issues in and around the school have been the result of disputes between private developers and the town.

The province certainly hasn’t stepped in to make sure that the students are getting the services they need so that they can foc us on their studies and do well in school.

Certainly, when we look at the minister’s definition of “effective, efficient, innovative and time ly inf rastructure servi ces,” if the minister could tell us how this situation that is presently occurring in Bow Valley high school, where water has to be ha uled into the school and the waste products removed in the same manner – how can we say that we have effective, efficient, innovative, and timely infrastructure services when after four years we still have not been able to hook up the sewer lines between the school and the lines that are there?

I would urge the minister to certainly make this a priority situation to get those lines hooked up so that this particular school will not have to experience any more delays in being able to use city water and, as well, to have their sewer se rvices hooked up so that they can be operational. The other situation that this has certainly led to is that Bow Valley school for four years now has not been able to water any of its fields, and certainly the grass that was growing there at one time has died because of the la ck of water. It is e ssential that somebody step in and solve this problem.

We cannot allow students to go to sc hool under these types o f conditi ons. Would the minister look at the possibility of intervening in this situation, getting the sewers hooked up, getting the city water so it can be used, and work out between all parties involved how the issues at hand are going to be resolved? As well, another issue is the access road to the school. The plans had indicated that it would be paved, and it has not been paved.

I would like to know what steps the minister will commit to to ensure that this s chool’s infrastructure and services are improved so that they at the ve ry least have pe rmanent water and sewer services, adequate playing fields, and a safe access road. Under core busine ss 3, goal 6: “Efficiently manage the govern-

May 5, 2004 Alberta Hansard 1263 ment’s air and vehicle fleets to provide safe, reliable and responsive services in a fisc ally responsible way.” We find this on pag e 278. Can the minister explain how the billing-back process works when departments book flights on government planes? The Deputy Chair: The hon. minister. Mr. Lund: Thank you, Mr. Chairman. I’ll have to apologize to the member, but I was having difficulty following him as he was going through asking very specific questions in different areas.

Of course, when you start talking about projects, I don’t have that in front of me, so we’ll have to get back to you in writing in the future. I didn’t catch all of what you were saying about if there was a shift in the priorization of schools and the amount of money that we’re spending, and I take it that’s new versus preservation. No, there’s not a shift. I just want to make sure that we understand that. As far as the infrastructure debt that has built up, yes, we acknowl- edge that and we have talked about it.

Of course, doing the audits on all of the buildings that we’re responsible for – the K to 12 schools, the postsecondary, the health facilities – we’ve got now a very good understanding of the condition of the buildings and what has to be done. We’ve advocated all along that we need to make sure that we’re preserving what we have – it doesn’t make a lot of sense to let that go into disre pair – but sinc e the provi nce is so dy namic and growing so fast, we’re also faced with having to build new on the school side.

Of course, as y ou can a ppreciate, part of t he problem we’re running into is the f act that a lot of sc hools now are in the w rong place, and you can’t just up and move them. We have to make that balance, and of course one of the things that anybody that’s served on any school board recognizes is the fact that it’s not easy to close a school.

So we’re looking at how perhaps we could work our way to see f it to give s chool boards m ore latitude in the closur e of schools and things l ike allowing them to plan a number of ye ars ahead so that they could let the ir parents know tha t this school is going to be close d. I don’t think it w ould be nearly as dram atic when the time would come. The rebate pr ogram. The ga s rebate program is the one that I believe you’re referring to, the fact that there ’s nothing in t he budget.

The way the sustainability fund is set up, that funding – and it occurred this past fiscal year – is where the money came from, out of the sustainability fund. It wasn’t a budgeted item. So that’s what would happen com ing up in the ne xt fisc al ye ar. If in fact the formula is trigg ered, then t he money will com e out of the sustainability fund. So it’s not a b udgeted item as far as the year coming up. The amortization – and I think you touche d on the $2 mi llion increase – is because of the increase in the value of the capital that we’re responsible for. It’s a percentage of the total val ue of the capital.

So it’s got nothing to do with the interest rate. That’s got nothing to do with it. It’s simply that we’ve added more capital; therefore, our amortization is higher. The c ourthous e. As I ’ve mentioned bef ore in the H ouse in answers to questions, the $170 mil lion was just for a provincial courthouse. That was not for a structure that would put all three courts together in one location. That was for just the provincial. So don’t confuse that number with what we were dealing with later on. 3:20 Yes, the costs did increase as we were going along. The fact is that the cost per square metre was going up.

You’ve got to appreci- ate that building a courthouse is not a normal thing that we’re into all the time, so we did underestimate some of those costs. But when you go to the last number that you refer to – I think you said almost half a billion dollars; well, the number that was kicking around out there was even slightly higher – that is not the cost of the structure. That’s the net present value when you take it over the 30 years and back it up to net present value. One of the unfortunate things that we do in government is if we finance something o urselves, pay cash f or it, we never show net present value.

We never do that. So it’s very, very misleading when you try to compare that number with the actual cost. What I tell you we will be doing is that we will be showing that number regardless of how the courthouse is financed. I know that it’s a tough one for people to get their minds around, but that $530 million is not cash. That’s not money spent; that is a book value of the asset, net present value. You’ve got to take it out over the 30 years and then back it up. That’s it on the courthouse. Your comments about the P3s.

I don’t believe for one minute that any patient going into a hospital – and I want to talk about hospitals because that’s the one you referred to – is going to ask the question: now, who owns the bricks and mortar? They don’t care about that. They don’t care who owns the bricks and mortar. They don’t care how the bricks and mortar were financed. What they care about is the health services in that struc ture, and we’ve never talked about doing anything but maintaining the current system with the delivery of service in that structure.

I think you were concerned about the maintenance of the structure and the cleanliness and those types of things and that they would be somehow below standard, and the reason that the operator would do that would be to make money. Well, when you write the con tract, you clearly describe t he standard that has to be met. If there’s a default, if in fact the operator would be not living up to that contract, then, of course, there would be penalty clauses, and the easiest thing to do is simpl y wi thhold paym ent.

If y ou have to in order t o accomplish what is necessary and what’s in the contract, you would put in your own operator. I don’t get a bit worri ed about that bogeyman because that’s easily covered off. As far as the cost of the money, we have found through our work on the Calgary courthouse that, yes, the private sector can’t borrow the money quite as cheaply as we can, but it’s only 40 to 80 points above. If government is backing it, they’re able to get that kind of a rate. Well, I can tell you that the risk that you transfer over there to the owner , designer, builder, operator is well worth those few points.

Of course, the process that we have established is, first, there has to be a business case for the project. Then if that is approved, if it’s a P3, it will come to our department, and the expertise that we have internally – if it’s a heal th facility, th en we involve Health; if it’s schools or lear ning, we i nvolve Learning peo ple; pl us Tr easury; they’re all involved – has to be satisfied that it’s good for Albertans. Then we move it outside to a totally private-sector committee, and they scrutinize it.

They have to approve it, and they have to be able to show that, in fact, this is a good thing for Albertans. It’s got to be efficient; it’s got to be cost-effective. We insist on having the full lifetime cost of that structure and the operations. So when you look at the whole operation, I believe that with the safeguards we’ve got in place, you won’t see any of them going ahead that aren’t good for the public.

Now, you talked about the Bow Valley school in Coch rane, and we agree with the comments you made that it seems very difficult to understand how a school could go four years without having water or sewer, and of course the pav ed road is, I think, not as large a concern as the fact that they don’t have water and sewer. Unfortu- nately, that school w as built w hen there w as a f ight goin g o n between municipalities and the developer. One of the things that

Alberta Hansard May 5, 20041264 we’re putting in place now to try to prevent this kind of thing from ever happening again: before we will give a school board the money, we have to approve the site, and approving the si te means that the services will either be to the site or there will be a commitment from the municipality to put them to the site. The ground. We will insist on testing having been done so that we don’t run into the si tuation lik e we had at Edson where over $400,000 had to be spent to satisfy the ground after they had decided where the building was going to be built.

I can give you other instances where we’ve run into those problems. Even right here in the city of Edmonto n there was an o verrun in excess of $ 100,000 because they found when they went to start t esting the soil that in fact they had to put pillars down to bedrock. Well, we need to know those things bef ore the adv ancement of the money, so they ’ll be taken care of. But it’s not the Department of Inf rastructure’s responsibility to provide any s ervices outside of the lot. We provide the services from the property line to the structure but not outside of the property line.

While some might say that has changed, no, it isn’t a change. What has changed is that y ears back if a school board de cided to build a school in a certain location and the services weren’t to the property, they simply went ahead and built it and then requisitioned the municipality. That’s how it used to work. I mean, I was there; I’ve done that, so I know how it worked. Now, of course, the province is responsible for the school, so what we’ve said is, “We provide the services from the property line to the building; end of story,” and I’m adamant that we stick with that. You asked what we might do.

I’ve been in dis cussion with the Minister of Municipal Affairs and with the Minister of Learning to talk about the Coc hrane situa tion, and we will hopef ully find a resolution to it, because it’s very unfortunate that the students in that school are the ones that are paying for this squabble that was there before that had nothing to do with us. Thank you, Mr. Chairman. The Deputy Chair: Hon. members, bef ore I rec ognize th e hon . Member for Edmonton-Glengarry, may we briefly revert to Introduc- tion of Guests? [Unanimous consent granted] head: Introduction of G uests (reversion) The Deputy Chair: The hon.

Member for Cardston-Taber-Warner. Mr. Jacobs: Thank you, Mr. Chairman. It’s an honour for me today to rise and introduce to you and through you to the members of this Assembly some students from the grade 9 class at Mountain View school and some of their teachers and l eaders. Ma ny of m y col- leagues have stood to recognize students from their schools in their constituency, and they have said that their schools were probably the brightest, smartest kids to ever come here and so on and so forth.

I won’t say that my students aren’t, but what I can honestly say about these students is that they probably travelled from the most southerly school of any group that’s ever come to this Assembly. It’s a school that’s right on the Montana border. I welcome them here today, and I would like to acknowledge their principal, Mr. Ken Peterson, and a teach er, Mr. Ja mie Quinton; parents Mrs. Connie Q uinton, Mr. Royce Leavitt, Mrs. Marina Leavitt; and their class president, Kaleen Roe. I would invite them to rise and rece ive the w arm traditional welcome of this Assembly.

Thank you. head: 3:30 Main Est imate s 2004-05 Infrastructure (continued) The Deputy Chair: The hon. Member for Edmonton-Glengarry. Mr. Bonner: Thank you very much, Mr. Chairman. Just a coup le of comments before I continue with my questions for the minister. Again, getting back to, first of all, Bow Valley school, I ce rtainly wasn’t asking the department to put those services in, but after four years some type of mediation process has to occur in order for what has remained to be done.

It would appear with what is taking place in that particular area that the parties involved who are responsible are not getting anywhere. I think it’s incumbent, whe ther it be Infrastructure, Municipal Affairs, whoever it may be, that may be it might be a co-o perative effort among ministries to rectify this problem, because four years to operate a school without running water is unbelievable, absolutely unbelievable. So I would certainly urge the minister to see what he can do in order to fulfill the role as mediator or see that somebody does to get this completed.

As well, when we are getting back to the Calgary courthouse, just a couple o f com ments t here. I’m looking at an articl e in thi s magazine called Open Mind. The title of the

article is Pursuing P3 Potential. In the last paragraph they talk about the three companies who were invited to participate in the request for proposal stage. It took three months to receive the [request for proposal] submis- sions, which i ncluded de tailed architectural de signs as we ll as financial and operating proposals. The submissions were carefully assessed during a three-m onth period, betw een June and Aug ust 2003. In September, negotiations ensued with two teams in order to assess which would become the preferred proponent.

In October, GCK was declared the preferred proponent and it has been negotiat- ing ever since with the prov incial government to reach financial close. This to me almost seems backwards in the way we do business in that we got to this stage and w e didn’t hav e a com mitment on finances. So when we get to that situation, then, certainly, I think we can continue to look at cost overruns or at least increases in prices.

I don’t know what the ministry has in its procedures which elimi- nates people who are bidding on a P3 project a nd lowballing their bids in order to get to this stage and then, once they are accepted, to have to incur the cost overruns, as we have seen in this particular situation. I want to thank the minister, as well, for his explanations on the questions that I had pr esented to him in the first

section of the debate. As my first set of quest ions was ending, I was asking the minister: can the minister explain how the billing back process works when departments book flights on government planes? How much has the Department of Infrastructure billed other departments for the use of the government aircraft? As well, i n 2003 there w ere 1,600 f lights taken on governm ent planes. Who was responsible for approving all those flights? What is their position in the ministry? Do other government departments play any rol e in approving f lights, or i s it all done through the Ministry of Infrastructure?

Does the Ministry of Infr astructure make the determ ination of what value the re is in f lying a governm ent pl ane com pared to commercial, or does the requesting department make that determina- tion, or is the determination made at all? On page 75 in the Alberta Infrastructure annual report 2002-2003 why were there authorized dedicated revenues of $1.7 million b ut actual revenues were only $887,000? Will the minister provide a detailed breakdow n o f where this $887,000 in rev enues for air transportation services came from in 2002-2003? As well, can the

May 5, 2004 Alberta Hansard 1265 minister tell us whe ther any of this $887,000 i n revenue was from individuals or corporations outside of government? In other words, was the total of $8 87,000 all paid f rom other government depart- ments, or was some of it from other outside sources? As well, if the minister could please indicate to us in dollars how much the gove rnment aircraft are expected to depre ciate over the next five years. I think t hat, particularly in one or tw o cases, the planes are getting to be fa irly ol d. Are t here any plans wi th the ministry to replace any of the aging aircraft?

On page 81 of Alberta Infrastructure’s annual report there’s a line item for revenue for air transportation. This line item is for $1.991 million. In Executive Council’s annual report for 2002-2003 there’s also a corresponding line item for expenses incurred by others for air transportation. T hat number is also $1.991 m illion. Can the minister explain this $1.991 million? Is this for Executive Council flights? If the minister also could, pl ease, te ll us who pa ys for Executive Council flights.

Also, is there a different process followed for Executive Council compared to other government departments in paying for their flights? I would also like to take the opportunity, Mr. Chairman, to make some comments and ask some questions in regard to infrastructure debt. This is found on page 279 of the business plan. While the ministry has recognized the ch allenges facing its department with regard to growth an d an agi ng infras tructure, it has not identified effective solutions that will not place Albertans’ essential buildings and services at risk.

Its capital plan addresses only a small number of priority needs, realized primarily on the risky funding scheme of public/private partnerships, or P3s. On page 279 P3s are identified as a reality here in Alberta. How ever, it remains very much an experiment, particul arly when it comes to priva te c ompanies building, maintaining, and operating normally public facilities. The department itself states that it is “challenged with determining the merit of each proposal. Each partnership . . . requires extensive evaluation and exper t analysis.” We find this on page 279 of the business plan.

This certainly is an interesting statement because it recognizes the challenge of assessing whether a P3 proposal brings value for money to taxpayers. We believe that this i s parti cularly true for essential public services, which have traditional ly req uired the prote ction of the government to e nsure t hat their integrity is upheld. Schools, hospitals, courthouses, and highways are crucial infrastructure that directly impact the quality of life in Alberta. These facilities require stringent quality controls to maintain and enhance services, accessi- bility, and accountability.

In such cases the government is account- able to the taxpayer

whereas the private sector is not. 3:40 This begs the question as to wh y the government has decided to pursue P3s for priority needs when this gov ernment has fa iled to produce any evidence that P3s are cost-effective for Albertans, when there are so m any appa rent downf alls to usin g a private /public partnership to build, maintain, and sometimes operate a traditionally public facility. So my question to the minister is: what studies has the Ministry of Infrastructure conducted or consulted to ensure that P3s could provide value for money here in Alberta?

If the minister would please not only name the studies but, as well, table them here in the Assembly. Could the minister please explain how P3s save taxpayers’ money given that the Alberta government can finance public capital much cheaper than any private corporation? As well, i n the building of P3s, private corporatio ns have to protect themselves against sudden cost increases, so certainly there is a level of protection that is built into their bids.

I think the best example we have today – and it’s been mentioned many times in this House – is how y ou can’t even get a price for steel which will be held to for much more than seven days as things currently exist in the world today. Certainly, I think one of the reasons that we have the situation that has arisen is the massive explosion of infrastructure projects in China that are galloping along at an unprecedented rate.

My next quest ion to the m inister: is he concer ned that ther e is private control of public buildings and how the re is going to b e a reduction in the public’s control of its own buildings and services? Certainly, when we look at, for example, if a P3 model were to be used to construct a hospital, such as the examples we’ve had in England, which were dismal f ailures by the way, w hat is this particular ministry going to do differently in order to m ake certain that we don’t fall into the same pitfalls that England experienced in their P3 hospitals?

I believe t here was a P3 hos pital i n Su rrey, British Columbia, that certainly fell victim to the lack of controls of the government in its operations. If t he minister could expand on that, please. How do P3s provide any savings for taxpayers when the private sector also builds a profit into t he final cost and cons ultation and legal fees can reach phenomenal rates? As well, along the same lines, if the minister could please provide us with the cost for consultation and legal fees that have presently occurred in the proposal for the Calgary courthouse.

Given the profit factor with regard to private companies involved in P3s, can this not result in lower overall quality on projects when firms try to maximize profit margins by cutting corners? I think of our example of the Ha mptons school in Calgary, which was constructed with res idential g rade building m aterials and not commercial grade. L ess than thr ee years after its c ompletion the school board wa s required t o spend $150,000 on upgr ades and repairs because of a lower standard of building materials.

As well, I think the Calgary courthouse, again, is a prime example of how P3s can be plagued by cost overruns at taxpayers’ expense when projects are poorly managed and contracts are poorly framed. How can the Alberta taxpayer be a ssured by the government that there is an effective and efficient way of evaluating costs to Alberta taxpayers?

The g overnment h as an adviso ry committee on alte rnative financing, and a number of these people on that committee are from the private sector, so certainly there has to be some type of evalua- tion used by the department to make certain that there isn’t a bias in choosing a P3 over the traditional way of doing bus iness. If the minister could please indicate how this d ecision is made as to whether there is a benefit to doing the proj ect either through the traditional methods that we have followed in this province for many, many years or whether we choose the P3 model.

How do we know that where P3 projects do demonstrate savings, it is not due to staff cuts and layoffs, service cuts, new or augmented user fees, and lower quality of services? I think that if we want to look at an example where I certainly get many questions from people, it’s where we have moved to a private company for road maintenance and particularly on highway 2.

We know that highway 2 is a much-used highway in this province, that the amount of traffic and the amount of heavier loads that travel that route have certainly increased over the last decade, yet there is great concern that the condition of the highway is not being maintained, that the condition of the highw ay has be en compr omised. So certainly with a P3 m odel there i s great concern, a s I indicat ed. There are a number of different things, whether they be staff cuts or service cuts or whatever, that people are very, very concerned with.

Again, when w e look at P3s, by handing over essential public services to the pr ivate sector, the go vernment will lose in-house

Alberta Hansard May 5, 20041266 expertise, effectively diminishing its capacity to provide this service again. We thus become more vulnerable to private-sector interests or more dependent on P3 schemes. I think that probably the great example we did hav e, not only in this province but wor ld-wide, w as whe n we had a treme ndous downturn in the economy in the ’80s, and everybody was downsiz- ing. One of the st rategies companies like GM and IB M used to combat this downtur n was to lay off management.

What both of those companies found was t hat t hey had l ost their c orporate knowledge when they did this, and both of the companies indicated that it probably took them in the neighbourhood of 10 years in order to get that corporate knowledge back.

Because of the loss of that, there were great inefficiencies in those companies. 3:50 It is certa inly one of those s ituations tha t we w ant to avoid, because I know t hat over the years in our depa rtments here in the government of Alberta we’ve I think been blessed with civil servants who were extremely good in thei r particular areas, and I think that as we move more and more to a P3 model, as I indicated earlier, we do stand a risk of losing those experts from government. Thank you, Mr. Chairman. The Deputy Chair: The hon. minister. Mr. Lund: Thank you, Mr. Chairman.

Well, I could spend the rest of the afternoon on P3s, but I guess it probably would not resonate in the minds of the opposition, so I won’t for the rest of the people that clearly understand them. [interjections] Oh, you want to hear more? Okay. It’s interesting to note, Mr. Chairman, that their kissin’ cousins in Ottawa have done so mething that’s kind of interesting. They’ve appointed Liberal MP John McKay as the Prime M inister’s point man on P3s. He just recently made a comment about government operations and the nee d to bring the whole s ystem into the 21st century. Mr.

McKay went on to describe those opposing moderniza- tion – namely, public/private partnerships – the public-sector unions and the NDP, as being locked in a Marxist-Leninist dialogue of the 1960s: strong rhetoric from a government about to call an election. He then went on about the federal government’s preferred method of private-sector involvement being through P3s, p ublic/private partnerships. So that’s what came out of the federal government.

It’s also interesting to note that the new Liber al gover nment in Ontario, when they were in op position, of course denounced what the government was doing about se tting up any kind of P3. They called it something different when they came into office, but they proceeded with the same process. Then our fr iends over on the other s ide of the country i n B.C., when a number of us met with a number of their cabinet ministers, were very anxious that we work together with their minister of public works in order to promote P3s, and this is c oming f rom another Liberal government.

So I guess i t’s fair to say that some of them have seen the light; others don’t. The member talked about the process. Well, let me describe the process as far as the Calgary courthouse is concerned. The first thing we did is we called for an expression of interest, and there were some 125 individuals , groups that responded to that. F rom that, then, we put out a request for qualifications, and there were – I don’t remember – nine or 10 that responded to that request.

Out of those, we narrowed it down and determined that there were four firms that were qualified to enter the race as far as the request for proposal was concerned. We got the request for proposals in, and there were three compa- nies that responded to that. Then we broke the projects into seven different components. Seven different components. We had people assigned from the outside a s well as people f rom the de partments that looked at each one of those components. But, Mr. Chairman, it’s really important to understand that the different proponents were not identified. They had A, B, and C.

That’s how the proponents were identified. We had all these different groups. For example, the group that was looking at the desig n: that’s a ll t hey looke d at in the three projects. They scored each project, and we went on down the line. That clearly showed two that were better than the one, so t he one was dropped. Then there were negotiations started with those other two. Out of that, finally one was chosen.

In this whole process we had appointed a very, ver y honourable and outstanding individual by the name of George Cornish, who was at one time the commissioner of the city of Calgary, a very outstand- ing individual, and he and a couple of other people were charged with maki ng sure tha t this was fair, that it was open, and that everything was above-board. He came back with a report and said that it was squeaky clean, that there was nothing untoward about the whole process, and that everybody was treated fairly.

As a matter of fact, it was interesting because we got comments back from people that didn’t get into the last round, and they admitted that the process was fair and it was open, and they were not concerned about that. The opposition continually talks about the increased price of the structure as we went along. The fact is that the cost per square metre did not go up from the choice of the – actually, after we had chosen the two to stay in the race, those prices did not change. There were a number of other things that chan ged tha t ended up boosting the price, but it was not the construction costs.

Of course, as I explained earlier today, the number that the opposition keeps referring to, over half a billion dollars, is the net present value, which is n ot a cas h outlay. So I hope that we’ve got something a little clearer on that whole process. I’ll get back into this P3 thing a little later on, but because he raised the Calgary courthouse – I’ll just leave it at tha t at this time. The billing that you referred to on the aircraft – I think you talked about the approval and who flies on the planes. The way the system works is that Infrastructure is responsible for the aircraft.

When the Premier books a plan e, his dep artment books it, and we don’t get involved except that the manifest comes over to us. If a member of Executive Council wants to use the aircraft, then it comes to us for our approval. If a department wants to use the aircraft, the deputy minister has to approve it. That’s how the approval system works. Internally, then, when it’s a depar tment that b ooks, we charge back to the department. That’s where the $887,000 that you talked about for revenue came from, other departments paying us back.

The breakdow n that you see, the $1.99 mi llion – I’m sorry; I didn’t follow exactly where it is. That number rings a bell for me, and $1.9 million was the cost last year for the aircraft for Executive Council. Okay? Executive Council. There are a number of other items in there, a mortization and capit al, bringing it up to the $3.4 million. So there’s about $1.5 million left over that is departments, and the $887,000, I believe, is the number from the other dep art- ments. Who flies on the government planes?

Well, w e’ve got those guidelines, and I know that we gave them to – I guess it was maybe the press, but I thought y ou had a copy of thos e. Fi rst of a ll, all MLAs can fly on those aircraft. Certainly, the opposition has availed themselves of that, maybe not lately. You don’t have any members outside of Edmonton, so you don’t have the same reason. But when

May 5, 2004 Alberta Hansard 1267 you had an MLA in Calgary, he flew on those planes. When you had a member from Fort McMurray, he flew on the plane. So it’s open to MLAs. 4:00 Who else can fly? Well, spouses can fly if there’s room, only if there’s ro om. If a spouse flies w ith a member to a function that they’ve been invited to and it turns out that on the way back there’s another government member, then no, they can’t fly back. We’ll get you the whole detail on that, but that’s basically the way it works. You ask ed about the a ge of the aircraft, and you a sked about depreciation over the next five years.

Let’s just get you that number. I don’t know it off the top of my head. Airplanes depreciate very fast, and th ey kind of lev el off, and then they take another dip. I happen to know because I owned one. The age of the aircraft, the 200s: one is an ’80; one is an ’81 model. Then, of course, the 350 is a ’97 model, and the Dash is somewhere in between there. I don’t know the age right off of my head. You asked about the replac ement. Well, tha t’s a tough one because, like I jus t finished telling you, the depreciation is rapid, levels off, the n rapid. Unf ortunately, we’re getting to that rapid stage again.

One of the things that happens when you get so many hours and so many years is you have to do what’s called a vessel test. That means they’ve got to strip the whole plane down, pressurize it, and test the s kin. Of course, m etal testing goes on in the whole structure of the aircraft to make sure that there are no cracks or weak spots. So once you get to that level, that’s fairly expensive, and it’s costly to us beca use, of c ourse, then w e have t o charter while the plane is down. We try to book it when it’s not in, like, a firefighting season or that sort of thing, but it’s not always that easy to do that.

Now, you talk ed at leng th once ag ain about P3s. Y ou we re so worried about that horrible, horrible word “profit.” Well, what do you think that a contractor that bids on a project – do you think he’s doing it o ut of t he goodness of his hea rt? No. H ow about the architect? Did they do it for the goo dness of the heart? No. They’ve all got profit built in even if we are going to pay for it and we put out a bid. There’s profit in all of those, and you have to have profit. People have to have profit. They can’t operate if they don’t have profit.

So to be all bent out of shape about profit being in a P3 – well, yeah, sure there’s profit. But there is if you do it in any other way too. The profit that I think you pret end you’re worried about is the profit on the money that they borrow. Well, not necessarily. You mentioned steel, which is a v ery good one. I w as glad you men- tioned that because the fact is, like with the courthouse, the prices go back to September, I think, before the steel went way up, and those prices are stil l holding. W ell, guess what? That ris k is all being transferred over to the private sector.

If we were now putting out the tender, we would be faced with those increased prices. So what’s difficult to assess in these projects is: what is the value of off-loading risk? I’ve asked the Auditor General. I think we’ve discussed it in Public Accounts more than once. What is the value of off-loading risk? That’s a tough one to quantify. Also, another one that’s tough to quantify is if you get a structure built, say, two years earlier than you would if you were waiting for government financing. What’s that worth? Well, that depends on the structure.

It depends on a whole number of things, and thos e have to come into the ca lculation when you’re assessing: is this a good deal for Albertans? You mentioned some of the proj ects that have gone sour. How would we do things differently? Well, I think I’ve des cribed numerous times the process – and I won’t go through it again – but the fact is that all of those safe guards are built in there, and at the end of the day we’v e got to be able t o sho w that it’s g ood for Albertans. The quality of the structure. That’s easy to monitor. There a re different classifications of materials and structures.

You write that into the contract. Very simple. Of course, if you find that they’re not living up to the co ntract – it ’s lovely when you ask fo r some equity in the contract. That would be one way of ensuring right up front that: okay, you put some cash on the table, and if there’ s a problem, we dip into the cash and we rectify it. There are just so many ways that we can make sure that we’re getting the quality of structure that we demand and t hat it would be si milar to what we would build ourselves.

I think you’re not giving nearly enough credit to the private sector in their innovation and the ways that they can do things that maybe are something that we can’t access. What I’m thinking of is larger companies, particularly. When you talk about this steel thing, don’t you think tha t a lot of them had already contracted a lot of s teel? You bet they ha d. A lot of them ha d because they know they’re going to use a lot this summer. They contracted that way back last year. Can we access that when we go out to a bid? Not likely. But we could access it where we were into like a P3.

I really take e xception to y our comments about the out side committee, because on that committee we have outstanding individu- als. They are leaders in their communities, they’re very strong on the financial sid e, an d th ey un derstand b usiness. To say t hat they somehow would be biased, that some would be not capable – I’m not sure what areas you were describing, but let me tell you that we have total confidence in those pe ople that ar e on that al ternate finance committee. They’re there only because of their outstanding abilities, so I really feel bad that you would take a run at them. Thank you.

The Deputy Chair: The hon. Member for Whitecourt-Ste. Anne. Mr. VanderBurg: Thank you, Mr. Chairman. A couple of things. First and foremost, I want to thank the minister and his department for recognizing the need for a new facility in Onoway. The facility that is going to be replaced was built in 1921 for a cost of $11,500. The Onoway community serves about a thousand students. So I’d like to thank you for recognizing the need in that community. The second point that I wanted to raise – and I haven’t heard it in the presentation that you made – is related to the federal building just down the street.

What’s the plan that your department has to dispose of or sell this building? Mr. Lund: Mr. Chairman, it’s kind of a perennial question that the member asks annually, and I want to thank him for that because we don’t want to forget. An Hon. Member: It keeps you on your toes. Mr. Lund: Exactly. As one hon. member said, it keeps me on my toes, and that’s good. We are currently trying to assess all of our options and what we might be able to do with that building.

It’s a cost to us to maintain it and keep it, so I can assure the member that we haven’t forgotten it, but it’s difficult to really get something moving on it. I guess I can just advise him to stay tuned. 4:10 The Deputy Chair: The hon. Member for Edmonton-Strathcona. Dr. Pannu: Thank you, Mr. Chairm an. I also want to tha nk the

Alberta Hansard May 5, 20041268 minister for his int roductory comments and thank the depa rtment staff who are present in the gallery and taking notes. I want to just shift the focus for a moment slightly in the questions that I a sk the minister. Mi nister, I w as looking at the 2004-2007 fiscal plan, and under the Audi tor G eneral’s Recom mendations there’s the Infrastructure department mentioned on pages 148 and 149. For the sa ke of c onvenience and for re ference I draw your attention to it, recommendations 26 and 27, and the response of the government, the department, to the recommendations.

Let me first, for the benefit of the other mem bers in the House, read the Auditor General’s recommendations. Recommendation 26 deals with ter ms and c onditions of const ruction gra nts, and the Auditor General’s report says that we recommend that the Ministry of Infrastructure communicate, and require grant recipients to formally accept, the terms and conditions of construction grants.

The terms and conditions should include: • an accountability framework, including roles and responsibili- ties • the consequences of failing to adhere to the terms and conditions • reporting requirements • the Ministry’s right to audit. Then on the right-hand side column oppo