1995 Legislative Session: 4th Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 29, 1995

Afternoon Sitting (Part 2)

Volume 21, Number 19

[ Page 16471 ]

The House resumed at 6:35 p.m.

[The Speaker in the chair.]

Hon. G. Clark: In

Section A, I call Committee of Supply for the purpose of debating the estimates of the Ministry of Government Services; in Committee B, I call the estimates of the office of the Premier and cabinet office.

The House in Committee of Supply B; D. Lovick in the chair.

ESTIMATES: OFFICE OF THE PREMIER AND CABINET OFFICE

(continued)

On vote 8: office of the Premier and cabinet office, $4,365,000 (continued).

G. Wilson: Before we adjourned for the supper hour I was asking the Premier questions with respect to trade. In particular, I had an interest in the group that went to India. Over the supper hour, his able staff promised to set up a meeting with that group, so I think I will take the opportunity to meet with them directly and educate myself as to what is going on in that most fascinating and very lucrative part of the world.

The second of the three principal headings I gave the Premier when I stood up was the question of first ministers' conferences and the relationship between the provincial and federal government.

As this is clearly within the mandate of the Premier, I draw the Premier's attention to remarks he made in response to a question directed to him by the member for West Vancouver-Garibaldi, who said that one of the things that the Premier can assure us of is that there will not be a conference on the constitution, to which I think I said, "Shame," and he said that most people don't want to hear any more about the constitution. That may be true, but I am not sure that we are going to have that luxury, because clearly there is going to be some kind of a vote in the province of Quebec this fall.

It would seem that that vote, no matter how they amend the wording of the question -- and the wording is likely to be amended -- is going to be more palatable to that group that the Premier outlined were interested in some form of sovereignty-association with Canada. If indeed the question is worded as it would seem that Mr. Bouchard would like it to be worded, it would be very difficult for the people of Quebec to vote no. In fact, they would argue: yes, we do want to have sovereignty-association with Canada if the alternative isn't spelled out.

Hon. M. Harcourt: I have already expressed the B.C. position. I think it is widely shared in this Legislature that we want to see Canada remain united. We want to wish the people of Quebec well when the referendum comes forward this fall, and we hope they'll vote yes for staying in the federation of Canada. As we have shown, there is a great deal of flexibility in Canada for change within the federation. Status quo Canada isn't what British Columbians want. A lot of Canadians want to see change within the federation.

I am certainly not going to get involved in any hypothetical discussions of the various options that could happen if certain things occur in Quebec. As a matter of fact, I have spoken to Daniel Johnson, who is leading the debate on the federalist side -- voting for Canada, for federation. I have told him that I'm going to be.... All the other Premiers have said that we're going to be a positive part of this question; we're not going to give any fodder for the separatist cause by making inflammatory statements or by answering hypothetical questions which then get distorted through the media in the Quebec debate.

We want the people in Quebec to decide to stay in Canada; and it's a very simple choice between separation and staying in the Canadian federation -- the other alternatives either aren't understandable or aren't acceptable. That is, I believe, the position of the vast majority of British Columbians. I think that most British Columbians are prepared to say: "It's a choice of whether you're in or you're out, and we hope you're in." That's as far as I think we should take it.

G. Wilson: Fair enough.

One of the approaches that is being taken now with federal-provincial relations is to try to remove duplication, which is something that I think all of us would support; certainly I support it. The Premier spoke in favour of it in response to questions raised earlier on in these debates. I note that yesterday there was a meeting between the new Premier-elect of Ontario -- or perhaps Premier by now; he's probably sworn in, I think -- and the Prime Minister with respect to the removal of the Ontario obstacle to the blending of the PST and the GST.

It was interesting that the comment from the Prime Minister was that if Ontario gives up its objection, the rest of Canada will be simple -- it will be easy, I think he said; they'll just fall into line.

There's an implication for British Columbia of a blended PST-GST. I think we have to recognize that British Columbia is in a rather unique position with respect to federal taxation and the amount of money we send to Ottawa in relation to the amount of money we actually get back, especially as we're getting fewer and fewer dollars returned because of the federal government's decision to cut transfers to B.C. I wonder what the Premier's position is with respect to this. Is there an intention within the Premier's Office to take a position on this question? Is it something that he is actively spearheading in B.C.? I ask these questions in an honest spirit; I'm not one to

[ Page 16472 ]

try and find future policy, but to simply find out what the thinking of the government is with respect to that whole question of blending.

Hon. M. Harcourt: That's the billion-dollar question. That's really what the challenge is that the federal authorities have not been able to resolve -- either the previous Tory government or the present Liberal government. The proposals we've had from the federal Finance minister, when you strip it all down, have one essential component, and that's a billion-dollar shift from business to consumers.

We have, through the Minister of Finance, who has just returned from Edmonton, where she was meeting with Minister Martin and the other Finance ministers.... She has been, I would think, grappling with that issue. I'm certainly pragmatic about it. If we can cut down bureaucracies and have one tax-collecting agency for PST and GST, if we can get rid of the complexity of the system and the anger Canadians feel toward the GST -- which was such a badly botched tax.... I think that, as British Columbians and Canadians, we'd like to see that resolved, but not if it's a billion-dollar shift to consumers.

[6:45]

We're certainly open. We're carrying on a discussion with the federal Minister of Finance about ways we can cut down the bureaucracy between the PST and the GST collection. What is it -- 8,000 to 10,000 people collecting the GST? That's just a monster. We'd like to see a solution that doesn't transfer a billion dollars of extra tax onto consumers.

G. Wilson: I just suggest that, as the Premier heads toward the Premiers' conference later on in the summer, which I understand is in Newfoundland this year, he may want to take a firm position with respect to British Columbia's views on this matter. It would seem to me that that shift is inevitable if we're to follow up on the current thinking and writings of the current federal Minister of Finance.

Similarly, what that is effectively going to do is take a very unpopular federal tax and nicely blend it and dump it into the provincial purview, where it will become an extremely unpopular provincial tax. It seems to me that there was an election promise made by the federal Liberal Party -- part of their little red book -- that they were going to do something about the GST, and that didn't include dumping in onto the provinces and trying to blend it into a provincial tax.

I would hope that the Premier will take a very strongly worded message from British Columbia that we won't accept that kind of off-loading. It is a big issue, even in the question of the bureaucracy surrounding tax collection. I'm told that even on the GST rebate we are looking at, I think, in excess of 2,600 people who were hired just on the rebate provisions alone, which sounds like an astronomical number of people to handle what is a rather peculiar system of tax collection -- where they take it from you only to assess how much you have given in order to give it back. It's mind-boggling.

Having said that, let me move on then to one other area of the first ministers'.... It has to do with the notion of constitutional reform around first nations negotiations and agreements. As the Premier knows, I've taken a particular interest in the Canadian constitution and the responsibilities, particularly the fiduciary obligation, of the federal government with respect to aboriginal people in the province.

I'm of the view that under the current minister, there is an enormous amount of off-loading of obligation and responsibility by the federal Department of Indian Affairs and Northern Development. This department is spending $5.4 billion in this year's fiscal budget -- the largest single departmental expenditure increase of any; in fact, only two got an increase: old age pensions and the Department of Indian Affairs -- some $5.4 billion, which is half of what we spend on Canadian national defence.

Yet we are seeing in the treaty negotiation process a reluctance to give a mandate to negotiate. We are seeing a dumping of responsibility with respect to the interlocutory process on reserve boundaries and roads. We are seeing an almost belligerent -- and I choose my words carefully -- attitude with respect to provincial matters, which effectively binds the hands of the provincial Minister of Aboriginal Affairs because the federal minister refuses to take action. Adams Lake is one clear example. I mean, this is not a provincial problem; it's a problem that rests solely in the hands of the federal Department of Indian Affairs.

It seems to me that the Premier must recognize the constitutional and fiduciary obligation of the federal government, which is not being lived up to, in relation to the powers of the province in the settlement of those kinds of aboriginal questions. Notwithstanding the fact that we are into a treaty commission process for some aboriginal communities -- not all -- and that we have legally binding agreements between the federal and provincial governments on that Treaty Commission process, it seems that those interior bands in particular, the Union of B.C.

Indian Chiefs, that have refused to participate in that statutorily established process are the responsibility of the federal Department of Indian Affairs and Northern Development.

I wonder if the Premier can tell me the thinking on that and what communication is taking place between the Premier and the Prime Minister. Quite clearly, it's at that level that we're going to have to get some ground rules established here, before we find that there is a very convenient off-loading of responsibility and obligation with respect to the first nations question.

At the same time, of course, fishery matters are dealt with by the federal Department of Fisheries and Oceans, while matters of funding for aboriginal communities rest with the Department of Indian Affairs and Northern Development. In effect, it's saying: "Where there's a problem, we'll throw it to the province. But when there are moneys to be controlled, we'll manage and handle that federally." That's something the Premier needs to take up directly with the Prime Minister, who himself was at one time the federal Minister of Indian Affairs and knows only too well what those fiduciary obligations and responsibilities are.

Hon. M. Harcourt: There were a number of issues that the member raised there in regard to first nations, constitutional reform, the problem of federal off-loading, and a variety of ways...or a thousand nicks that add up to a lot of nickels and dollars. In very short order it comes back on the provincial taxpayers. The Minister of Aboriginal Affairs has just returned from Ottawa, where he was meeting with the federal minister. These are some of the issues they were sorting out.

As you know, we have been meeting with, writing to and urging the federal minister to deal with the Adams Lake road situation for a long time. Now the chickens have come home to roost. There are solutions if people want to sit down and

[ Page 16473 ]

come to solutions for this situation. Our courts here in British Columbia.... The judge just ruled very clearly that this land is owned by the aboriginal people because the federal authorities didn't act for a long time.

It's particularly a problem that the two-thirds of the aboriginal people in this province who want to be in the treaty process and to establish a new relationship.... As Chief George Watts of the Nuu-chah-nulth said: "We want to enter Canada; we don't want to leave it. We want to be part of Canada. We want to be self-sufficient. We don't want to be under Indian Affairs. We want to run our own communities, and we want to be partners in the areas of British Columbia where we live together. We want to be friends."

The problem is that the nations with whom we're having a number of these difficulties don't want to be part of the treaty process. They don't accept the concept that the province is sovereign within

section 92 of the constitution in our federation, and they will only deal nation-to-nation -- i.e., with the national government, not with the province -- which creates a real challenge. The sooner we can have the one-third of the aboriginal people who are outside the treaty process at a treaty table, the better, and if the member has some ideas about how we can do that.... The bells are....

Interjections.

Hon. M. Harcourt: Okay, that's the last question finished. Please call the....

But it's something that does preoccupy me. How can we find a way to create a treaty table that is satisfactory to a bilateral relationship with the province? Also, they're in our area of sovereignty, and that's part of the tension. That's where part of the conflict comes in.

Then there are some people who are non-aboriginal and some who are aboriginal who don't want the treaty process to succeed, and they are out actively trying to sabotage it. That's another major problem. They really want to see incivility, conflict, bitterness and anger between the aboriginal and non-aboriginal people, not to move on to new relationships.

We're at a very trying time in our history. I hope we come through it successfully, and I think we will. The treaty process is not a perfect approach, but I think it's the only approach. Litigation in the courts, tying up land like Meares Island for years so nobody can utilize it, roadblocks and confrontation don't work.

G. Wilson: I have one more question on this line, and it has to do with a comment the Premier made. I think I recorded it accurately, and I think it was a response to a question from the Leader of the Third Party, but I could stand corrected on that.

The Premier suggested that, other than the Nisga'a, he didn't see that there was going to be a final resolution to a treaty within this particular term of the estimates debate -- i.e., within this year -- and therefore didn't want to speculate on how the procedure might work with respect to ratification. I think I'm accurately paraphrasing what he suggested.

I can't let this set of estimates go by without pointing out to the Premier that two days ago, or maybe yesterday, the Sechelts received the federal mandate. There is now nothing stopping them from resolving their comprehensive claim. They have the provincial mandate, they finally have the federal mandate, they are at the table and they have had eight years of very successful self-government that has worked extremely well with local government. To be sure, there are some areas where we don't agree, but it has been very successful. I think the dollar figure being discussed is not unrealistic.

Although there may be some give-and-take at the bargaining table on that question, it's not unrealistic; and their comprehensive claim is documented absolutely specifically.

It would be a very real opportunity to demonstrate that this process can work. In fact, I believe that it's the best opportunity the government has to demonstrate that this process can work. We have already put in place the provincial statutes required to allow the self-governing process to be a reality. Federally, the same has been done. We've successfully had this in place for some time.

Where there is going to be a sticking point.... I believe there is a constitutional problem that the government is going to have to deal with on this question, and that's why I take it to the Premier. Ultimately there is going to have to be some understanding between the federal and provincial governments with respect to their ability to acquire fee simple property as a part of the settlement.

I don't mean to get it as part of the comprehensive claim; I'm talking about their ability to take, as a proportional amount of their income, the opportunity to purchase fee simple lands, which will then become a part of that overall jurisdiction. Can they continue to buy, add onto their land through fee simple purchase, which then alienates that land from the normal Crown base or the normal fee simple base that would be registered under land title in the province?

This is going to be a very controversial issue, and it's a difficult one constitutionally. I am not sure that the law as it is currently drafted.... In fact, I'm reasonably sure it doesn't provide for us to enter into those kinds of agreements. It would strike me that one of the potential solutions for this with respect to the government position on negotiation.... I don't want to give away what might be a good idea, but I do put it out in this debate. If we tie the prospect of representation in government....

One of the big problems I have -- and, I think, others have -- is the fact that in these self-governing propositions, the Canadian Charter is going to be challenged. Non-aboriginals who reside on those lands will be denied rights, because they can't vote, they can't run for office, and yet they're taxed. And there will be other Charter provisions that will not prevail.

So if one ties the opportunity for that representation -- even if it's proportional, to provide for a balance, so there is always majority rule by aboriginal people -- to their acquisition of additional land, I think we may be able to find some solution.

I offer that to the Premier, because I wonder if the Premier has discussed this with his federal counterparts. I believe there is a very serious constitutional difficulty that this province will have if it doesn't work out how it's going to deal with that very difficult problem.

[7:00]

Hon. M. Harcourt: I think it is very encouraging that the federal government has finally given a mandate to the federal negotiator at the Sechelt negotiating table. We have both -- the Sechelt and ourselves -- been waiting for

[ Page 16474 ]

many weeks for that to happen. As you know, for months the province has been more than prepared to start the negotiations, and we can now get at it.

The issue you talked about is an interesting one. We are hoping that these sorts of questions can be sorted out through the treaty process. One of the goals of the treaty process is to regularize relations, to bring certainty, to bring predictability and to get rid of these areas of fear and concern. You've presented a very interesting idea about tying non-aboriginal representation for the people that live on the aboriginal communities' land to the question of alienation of private lands and how that relates to the Indian Act, and all those kinds of questions.

I don't have an easy answer, and I wouldn't pretend to. Those are some of the questions we hope to sort out through the treaty-making process. I will certainly accept the idea in the spirit in which it was offered, which is to see this process succeed.

G. Wilson: I have just a couple of other questions, which relate to personnel considerations. However, the Leader of the Third Party indicates that he has a couple of questions that relate specifically to aboriginal affairs. While we're in that discussion, I don't mind giving him that opportunity, provided he has those couple of questions.

Hon. M. Harcourt: I have a practical time problem in that Brad Stafford, who is from B.C. Trade, has to catch a 7:40 p.m. helijet. I understand that the member for Delta South has some questions on B.C. Trade. If there are some questions that members would like to ask about B.C. Trade, I'd be more than glad to clear those off; and if I don't have an answer here, I'll certainly make sure that Brad and I get back to you on the question or comment that you may have. Could we deal with that and then come back to the Leader of the Third Party on the aboriginal issue?

F. Gingell: To make the 7:40 p.m. helijet, he's going to have to get away in a very short period of time. There may be other members who wish to ask questions.

Anyway, just to start with, I note that between your 1994 financial year and the 1995 financial year, the B.C. Trade Corporation changed auditors. Can the Premier tell me if that change took place with open tender, and what process was entered into?

Hon. M. Harcourt: The answer is yes. The five-year contract terminated, and it was then put out to tender. Five or six firms bid on the contract, and it then went through the normal process of selection and up to the board of directors.

F. Gingell: In financial statements, when there is an expense category called "professional fees," that normally refers to fees that a corporation or a business pays out for its operations, rather than to professional fees that might be described as part of programs or things. I notice that the professional fees in both 1994 and 1995 are somewhat high; they're up $1.5 million the first year and $2 million the second year. Can the Premier advise the committee on what kinds of matters are included in those professional fees?

Hon. M. Harcourt: That is part of the change -- and, I think the member would agree, a good change -- of changing the international office personnel from junior diplomats and agents general to trade reps, and of bidding on contracts and providing good, quality service based on performance criteria and results. So they are now professional fees that are paid to agents. In Singapore, Taiwan and in most of our areas we have trade reps where we used to have agents general, and so the amount is now described as professional fees.

F. Gingell: I'd like to suggest, through the Premier to B.C. Trade, that that's not an appropriate description. We think of professional fees as fees for lawyers, accountants and engineers, and if these are part of the programs and responsibilities, which they clearly are -- they're just a different form of salaries and benefits -- we could perhaps find a little better descriptive word.

One of the important roles of B.C. Trade is in the area of guarantees for export sales. The annual report shows the amount of guarantees that are standing at the end of each year, and the amount of guarantees that are in default or in question. I wonder if, in your briefing notes, you can advise the committee about 1993-94 and 1994-95 -- and we're really pleased to get these; it helps -- if you could give us the figures for the amount of guarantees given in each year and the amount of guarantees released in each year.

Hon. M. Harcourt: As of February 28, 1995, the guarantees in place were 25, for a value of $10,591,400. Guarantees that had expired were 84, for a value of $41.381 million. The guarantees in default were eight, for a value of $6,061,250. The total of guarantees issued is 117. The value of that was $58,033,650. The export sales proposed and incremental that that created was approximately $400 million -- $397.265 million. The number of job-years proposed and incremental that was involved in that was 2,275.

F. Gingell: Are these the figures for the fiscal year April 1, 1994, to March 31, 1995?

Hon. M. Harcourt: Those are the historical figures from the beginning of the program to now, as of February 28, 1995. The 1994-95 figures, adding in the March figures, are approximately 18 guarantees, valued at $8.9 million.

F. Gingell: The financial statements we got for this year and for last year tell us the gross value of the guarantees that are outstanding, for which the provincial government -- through B.C. Trade -- has given an indemnity as at the last day of the fiscal year 1994-95. In 1994 the amount was $19.4 million; in 1995 it was $15.8 million. It gives us the information as to the amount of guarantees in default and on which you may be called to make good, but it doesn't give the information that I think is the most useful in trying to measure the usefulness of B.C.

Trade: the value of the new guarantees given in the fiscal year. You take the value of the guarantees outstanding at the end of last year, the new guarantees given and the guarantees released as the transaction is completed, and that would give you the value of the guarantees at the end of the year. I want to get a feel for the annual volume of throughput.

Hon. M. Harcourt: I think you can see the historical figures that are mentioned there. There were about 117, going back to September 1989, which was when the loan guarantee

[ Page 16475 ]

program was introduced. You have approximately six years of history and a total of 117 loan guarantees, so you have approximately 20 per year -- 18 this year -- at around $10 million a year on average. This year it was $8.9 million.

F. Gingell: So if the volume of new guarantees for 1994-95 was just under $9 million and the amount of guarantees that were outstanding at the end of the year was $15.8 million -- in accordance with the statements -- that sort of indicates that the average life of a guarantee is going to be more than one year and a fraction less than two.

Hon. M. Harcourt: The age varies; it is usually from one to two years. At the beginning of the year there was $19.4 million outstanding. You add $8.9 million to that and then you deduct those guarantees of $12.5 million that expired, and you end up with the figure of $15.8 million that is listed here.

F. Gingell: That little

schedule in which you showed the guarantees might be a useful addition to make in the presentation of the financial statements. But this does indicate that these guarantees are given for relatively long periods of time. There must be some that are quite short-term -- i.e., the movement of a product that is going to be manufactured reasonably quickly and is going to a customer that is waiting for it. That transaction, if payment is against certified bills of lading or whatever, would take place reasonably quickly. Are there a whole bunch of old guarantees that have been outstanding for a long time, sort of five-year projects that are still awaiting completion?

Hon. M. Harcourt: The simple answer is no; the turnover is relatively quick, from around a year to two years. There are no long-term, five-year loan guarantee periods.

F. Gingell: Perhaps we could finish this subject with a commitment from the Premier for B.C. Trade to send me an analysis or a listing of the guarantees, so I can get a feel for the turnover time.

[7:15]

Hon. M. Harcourt: I'd be glad to do that, and if you want to meet with Brad and the staff at B.C. Trade, I'd be more than pleased to arrange that.

F. Gingell: B.C. Trade entered a new area last year; they made some investments. I was wondering if we could have a quick, brief understanding of what International Geomatics Services Corp. does.

Hon. M. Harcourt: It's one of the 16 strategic alliances that I talked about, where we brought in a number of the firms that deal in mapping and information systems about land and resources. International Geomatics Services Corp. is a number of firms -- and I can send the member a list of who they are -- who have come together and undertaken three contracts. I will at least give you an idea of the kind of activity they are involved in. They are, for example, involved in the Philippines, mapping and surveying a gas pipeline route. In the second area, over the Andes between Chile and Argentina....

Thirdly, they're assisting with oil exploration in West Africa. So this is a new strategic alliance that has come together, and it is starting to have some success by bringing the best talent we have in B.C. together in one presentation of this talent, rather than having ten or 12 firms bidding against each other and not winning the contract.

F. Gingell: I hope the government doesn't get into any problems about issues to do with the restriction of trade, creating cartels and those kinds of issues.

IGS has just started off. B.C. Trade invested $75,000 -- two-thirds of which you lost. The company has suffered a loss, I presume, of $150,000, and B.C. Trade's investment in it has a book value of only $25,000 at the end of this year, three months ago almost. One appreciates that often these things -- the investment in developing marketing programs -- cost money to get started, but I wonder if the Premier could advise what he anticipates this partnership may require in the way of further resources from B.C. Trade in 1995-96.

Hon. M. Harcourt: The budget for this year doesn't involve any increased investment. We try to have seed money, startup funds, to launch these strategic alliances and then have them be self-financing, with us at a certain point, within a year or two, putting in our staff time and the prestige of the province and B.C. Trade Corporation in partnership with these industries.... They become self-financing industry alliances.

F. Gingell: I presume -- it doesn't say so here, but I made an assumption, which perhaps was not correct -- that B.C. Trade's partners who own the other two-thirds of the partnership or corporation contributed similarly to the financing of this marketing operation -- i.e., the province put up $75,000 for a one-third interest. I presume the people that have the two-thirds interest, Underhill and Underhill, put up $150,000.

Hon. M. Harcourt: That's correct. One-third of IGS is owned through B.C. Trade on behalf of the Ministry of Environment, Lands and Parks, and the other two-thirds is owned or contributed to by B.C.'s private mapping and surveying companies.

F. Gingell: Moving on to Northstar Trade Finance Inc., of which B.C. Trade.... I'd like to suggest to the Premier, on his previous answer, that the investment in International Geomatics Services isn't recorded in the accounts of the Ministry of Environment, Lands and Parks. It's recorded as an investment of B.C. Trade Corporation, and I would imagine that it belongs to B.C. Trade Corporation. Presuming that is correct, could the Premier please tell me what Northstar Trade Finance Inc. does? I didn't see any reference to that in my quick scan of this document.

Hon. M. Harcourt: Northstar Trade Finance Inc. is, I believe, a very exciting and unique joint venture between B.C. Trade, the Bank of Montreal, the Ontario Ministry of Economic Development and Trade and Dalhousie Financial Corp. We also have the western diversification fund involved, with a $150,000 no-interest loan to help with the startup and first-year operating costs. What it intends to do is give a complete package of financial services to exporters, and have a smorgasbord of services tailored to the individual small or medium-sized B.C. firms that want to export.

So it's an example of B.C. Trade not growing larger but, like MacDonald Dettwiler, spinning off companies at a certain

[ Page 16476 ]

point to be self-sufficient -- as we did with the trade training program, which has been highly successful in taking people who are rookies in international trade and running them through a basic ABC course. It's a self-financing course. This is another example of an idea that started in B.C. Trade, and then there is interest in the private sector to have it go outside B.C. Trade and be self-financing in a short period of time.

F. Gingell: I just mention in passing, so it is recorded, that again this company has lost $200,000, $210,000 or $220,000 in its first year of operation, one presumes from these numbers. Is it envisaged that with Northstar Trade Finance Inc. you have privatized your export loan guarantees? Does it cover that field? Will B.C. Trade be phasing out of the loan guarantee field?

Hon. M. Harcourt: No, we're not anticipating phasing out of the loan guarantee area. We've got a good, stable track record in the loan guarantee area. But we're experimenting with other forms of taking talents that may not exist in B.C. Trade and supplementing them with our private sector partners. So it's an interesting new experiment that we believe has some great potential.

No, we're not anticipating getting out of the loan guarantee program, because our small and medium-sized business partners in British Columbia see the loan guarantee program as a very effective tool for them, to help them to get to the contract. Then, of course, the federal program helps in the bridge financing between getting the contract and getting paid.

F. Gingell: As I said at the start of this discussion, this is something brand-new. B.C. Trade hasn't been in the investment business before. I can understand that both these functions are related to projects that government has agreed they can proceed on.

I know the amount is very small, but why does B.C. Trade have portfolio investments of $30,000? It's a negligible sum, and it just seems to me to be absolutely and completely outside the role of B.C. Trade.

Hon. M. Harcourt: That is a $30,000 investment by B.C. Trade that was made in 1994 to become a member of the Interhealth Canada organization, which is a cross-Canada company established to promote the sale of health care products and services internationally. In other words, it's the strategic alliance idea. We've got 16 strategic alliances here in British Columbia that.... Actually, we've expanded in the wood products area to include companies from Alberta, Manitoba and Ontario. Well, this is the same thing in health care, except that the company is in Ontario.

So we are part of this opportunity to take Canadian health care skills and suppliers of equipment, and look at marketing opportunities internationally.

F. Gingell: So this $30,000 is in fact a strategic investment, exactly the same as IGS or North Star. I presume that the reason it's put in as portfolio investments is that the company happens to be public. Is that the reason?

Hon. M. Harcourt: It was put in that way to give us, we think, more clout across Canada -- again, to take the best companies.... It's described as an investment. I'm not an accountant. I used to be a lawyer, so I understand the importance of these words being, hopefully, accurate in the professional sense. You're saying that this should be a fee rather than an investment, but it is a.... It makes us a player. It's an initiation fee to become part of this organization, which provides services to help Canadian companies sell health care services and goods abroad.

As a matter of fact, In February of this year we followed up on that with, I think, a very exciting experiment tied in with Capilano College, having student researchers stationed in China -- Dalian, Shanghai and Fuzhou -- preparing some research on a market for medical services. So we're doing some pilot projects to test what we think is a potentially very large market for Canada. We're joining this pan-Canadian organization and also initiating some of our own activities.

F. Gingell: The point I'd like to make is that I think this is a strategic investment. I think you should have said what it was; you should have shown it. I don't know why you suggested.... It's been put in there as portfolio investments at cost. The fact that you don't take up your share of the profits and losses is really irrelevant. The point is that what you've done is suggest to the public that B.C. Trade has gone into the business of speculating in the stock market, and you haven't done that. It's poor presentation. It should be described as what it is.

These financial statements are an important tool for B.C. Trade to let people know what is going on. Just as I had a minor criticism about an earlier description in the financial statements, I think this could well have been better described. I'm pleased to see the official from B.C. Trade nodding his head.

Hon. M. Harcourt: I agree with our officials in B.C. Trade. I'm very proud of them. I think we have an excellent staff at B.C. Trade, and they serve particularly our small and medium-sized companies extremely well. There are 500 very constant clients in strategic alliances. There are around 2,000 other companies that we're involved with in one way or another.

This is described as an investment because Interhealth Canada is a company and this is a $30,000 investment in that company. So it's described as a portfolio investment.

F. Gingell: I note that in this last financial year B.C. Trade spent $600,000 on furnishings and equipment. I wonder if the Premier could advise us whether that was spent to replace stuff that was getting old and tatty, and whether it was spent overseas or in Canada. Was it just for the purpose of upgrading furnishings, or was there some new organization that required furbishings?

[7:30]

Hon. M. Harcourt: That was a combination of furniture and equipment, leasehold improvements and others. But most of it was a conversion over to the Windows program. It involves both the hardware and the software.

F. Gingell: If I could just go back to the investments with one last question that I didn't ask.... When we discussed IGS, the Premier indicated that there would be no further investment required in the year '95-96. You haven't put anything into this year's budget for it. Does B.C. Trade anticipate further capital being required in this current year for

North-

[ Page 16477 ]

star Trade, for this portfolio investment? Do they have any other planned strategic investments that will take capital in this coming year?

Hon. M. Harcourt: I've been informed that we, B.C. Trade, are considering another $50,000 if the partners to this joint venture also will put in $50,000.

F. Gingell: More such.

Hon. M. Harcourt: More, yes.

F. Gingell: That's it? So at the moment $50,000 is the total amount that's anticipated being spent on strategic investments in '95-96.

They had an accounting practice in previous years in which they appropriated resources for programs in process that they had set up. There was $135,000 at the beginning of '94 and $125,000 at the beginning of '95. These were basically just a mental note to say: "We're in the midst of this program. This is what it's going to cost to complete. Let's put these funds on one side to ensure that we don't spend them on something else." I see you've wiped that out in '95. Is that because you don't have any more ongoing programs? Or is it because you've decided it's not an appropriate accounting practice?

Hon. M. Harcourt: That was set up to market government services internationally, whether it be land registry systems, the Assessment Authority.... That program has been completed. So $75,000 was returned to unappropriated equity and $50,000 to appropriations utilized during the year.

F. Gingell: If both the B.C. assessment and land registry programs are complete, have there been any resulting sales?

Hon. M. Harcourt: No sales. There was a very good potential for a sale in St. Petersburg. Unfortunately, a U.S. company of very deep pockets and substantial alliances with both hardware and software in computer systems won that bid. But there is, we think, still tremendous potential for a number of the new economies that are converting over to market and private property economies.

I'll just give the example of a friend who is the major shareholder in ABB, Stephan Schmidheiny, who was looking at a major project in St. Petersburg for his company, which is in Europe the equivalent of Westinghouse. He was in St. Petersburg looking at some land that was.... He was thinking of building an industrial plant. He said to the person in St.

Petersburg he was talking to: "Well, who owns that land out there?" The general manager or president of the state or municipal corporation said: "Well, I guess we do, because we cut the grass." They had no system of registering the ownership or of defining it -- of doing surveys and registering them, and then registering charges. So I think there is a tremendous market and need for this service. B.C., fortunately, has one of the best land registry systems in the world with our modified Torrens system. It's computerized and available instantaneously. We have the superb B.C.

Assessment Authority, and a number of others who are in operation -- mostly in the private sector -- that could go into a consortium. That was the one hot one we were looking at. We were looking at one of the Baltic states in central Europe, and we are talking to some of the authorities in China.

F. Gingell: Did people who were on contract to you, or did staff of B.C. Trade, ever travel to St. Petersburg and present the proposals over there?

Hon. M. Harcourt: Yes, they did. As a matter of fact, we also had the deputy mayor come to Victoria, too. I met with the officials from St. Petersburg, and they were very intrigued by our system. We just didn't have as deep a pocket, or whatever it takes, to do business in St. Petersburg these days, but we were very close. It was down to the last decision, to two of us, and I think we have very good prospects in the future.

F. Gingell: I did, through freedom of information, get the invoices that had been rendered to B.C. Trade by Chateau Enterprises Inc., which is owned by Mr. Robert J. Williams. Is it "J"? Bob Williams, anyway. When I sent the FOI in, I had asked for all fees and all expenses paid for, or on behalf of, and the $52,000 for the four months' work did not include any overseas travel. It included some internal plane fares -- Vancouver to Victoria -- but it didn't include any overseas conduits, and I wondered where those bills had been paid from. What corporation paid them?

Hon. M. Harcourt: Those figures are contained in the British Columbia Trade Development Corporation's consolidated statement of revenues, expenditures and unappropriated equity for the year ending March 31, 1994-95. It's in the centre part of the B.C. Exporter: Partners In Enterprise; you'll see it under the expenditures: "Programs: $3,745,000." The cost of the subcontractors who were part of this are contained in that figure.

F. Gingell: So I take it that Mr. Williams did travel to St. Petersburg on behalf of B.C. Trade Corporation in the development of this program and the presentation of it to the potential Russian customers, and that the costs were paid for by B.C. Trade Development Corporation and are included in here under programs.

Hon. M. Harcourt: No, Mr. Williams had a two-year contract and was paid a total of $167,668, which covered fees, expenses and air travel. That's all-inclusive.

F. Gingell: I guess what I should do is find out how I go about complaining about my FOI response. The FOI response included only four invoices. The FOI was asked for late last summer -- very late last year -- and it was specific, and all they included were four invoices from Chateau Enterprises Inc. which totalled $52,000. So I guess the answer is that something has gone wrong, or that something is happening. Maybe the Premier can explain it.

Hon. M. Harcourt: As I have just had it explained to me, the explanation is that a significant part of that travel and expense has happened in the last six months since the request for the FOI.

F. Gingell: My impression is that we didn't send the FOI in until after it had been going for a long time, but we will sort that out. That's an issue that we can get back to later.

B.C. Trade has entered into a three-way arrangement with Westcoast and Asea called B.C. International Power

[ Page 16478 ]

Group, a joint venture. Under note 9 there's a short description of the assets and the operations for the period from its commencement in October 1994 to December 31, 1994. What I garner from these numbers is that all of the capital for the operation of B.C. International Power Group -- $1 million -- is being put up by British Columbia Trade Corporation, and that Westcoast and Asea are not contributing any capital funds. Is that correct?

Hon. M. Harcourt: The three parties to the agreement are B.C. Trade, ABB, or Asea Brown Boveri Inc. -- which is, as the member is aware, a leading international energy and technology corporation -- and Westcoast Energy Inc. Each of the parties to the agreement has advanced $1 million for three years of the project. ABB's contribution, for example, is $500,000 in cash and an equal amount of in-kind services and facilities.

F. Gingell: So what is shown under note 9 is just the one-third interest that B.C. Trade Development Corporation owns in the joint venture. The true state of the joint venture, or B.C. International Power Group joint venture, is three times all of these numbers. Is that correct?

Hon. M. Harcourt: That's correct. The advantage is that we have as our partners one of the top natural gas companies in the world in Westcoast and their capabilities, as well as ABB, which has operations in 140 countries worldwide. They have, for example, 2,300 people in Canada and more than 800 in China. So we have a tremendous source of people, presence, experience and reputation from those two partners.

F. Gingell: In the report of the previous year the president and CEO, Ms. Exell, speaks about new programs by which you measure the effectiveness of B.C. Trade. I was wondering if the Premier could give us a rough outline on how this program works: the kinds of things that are being measured, what the criteria are, what the benchmarks are, what your goals are, whether or not you're meeting them, and so on.

[7:45]

Hon. M. Harcourt: Let me give a bit of background on the improvements that have taken place to the planning and financial management systems in B.C. Trade. There have been extensive improvements made to those two systems in '94-95 and carried forward in '95-96 to enhance the corporation's effectiveness as a professional service delivery agency. What is happening now is that planning is taking place in a multidisciplinary team form. So it is far more task-oriented, with goals being set.

What we are doing is integrating people from various parts of the corporation -- the sectoral, geographical and financial program services that are then provided to each client. What happens is that in-depth plans are prepared that incorporate strategic research and development, to start a definition of clear achievement targets, with time lines and budgeting of both the staff and program costs.

The financial reporting systems that are attached to that have been enhanced to provide information, critical analysis, for the decision-making along the way. The costs are tracked by activity and then matched to the results. Activities of lower priority or those that don't achieve appropriate results are either refocused or eliminated, as they should be. The infrastructure included is activity tracking, cost measurement, progress reviews, and changes or elimination of non-performing programs. That is the system that was put in place last year, and that is now taking place very fully this year.

F. Gingell: Are all of the benchmarks, the goals -- I think "targets" was the word you used -- objective, or are some of them subjective?

Hon. M. Harcourt: I would say a combination of both. Some of these areas are elusive or difficult to quantify as to whether it was B.C. Trade that helped get the deal, or whether it was the partnership or our part of the partnership. I would say that it is a combination of both, and I guess the proof is in the return of clients. If clients come back to get involved in further projects that we evaluate are cost-effective and a valuable use of the staff time, if they are supportive and write letters of support....

We've had a number of clients that I've received correspondence from that say what put them over the top was the partnership they've been able to form with our very good staff in B.C. Trade. The wine marketing effort that's been targeted into Great Britain is a good example of that, where our staff person is on contract to the B.C. wine industry to help put together their business plans and help in the marketing.

So there are a number of ways to measure the results. Some are quite objective and some are subjective, particularly in terms of client satisfaction.

F. Gingell: The B.C. wine example is perhaps a very nice one, because the wineries that are part of the group, whose product you are trying to help market, can record and tell you exactly what increase in sales has resulted from the efforts of the marketing group. Do you in your briefing notes have any results of that objective nature?

Hon. M. Harcourt: The best answer I can give is probably that one of the great successes has been in the alliance that has come together to market wood products -- the Canadian Comfort Direct, it's called. Richard Poliquin is the superb manager of this program. The increases have been really quite encouraging in the work he has done. It's expanded to include other provinces. It has grown to the point where there are somewhere around 29 different companies, two-thirds of which are in British Columbia itself, now involved, and $75 million.

They're now starting to work with the Export Council of Canadian Architecture, which is another strategic alliance -- of architectural services and building services -- that's been put together. A lot of these are just starting to get off the ground, and I think they're proving to be very effective. That's one. I think it would be useful for you to talk to Richard Poliquin to see the success that we are building up in these strategic alliances.

F. Gingell: I would be the last person to suggest that program outcome measurement is something that you produce with a magic wand. No, it's a long and tedious program. It needs commitment. Management has to think very carefully and very hard about what the appropriate benchmarks are and how you measure things. Let's get some targets set up. People will make lots of mistakes when they're getting started, but with time under their belts they will see how program outcome measurement can really make an organization effective.

[ Page 16479 ]

I have been told by members of staff that there have been, in some of the overseas offices -- particularly ones where there have been criticisms levelled about the use of taxpayers' money.... They have actually produced methods by which they can reasonably measure the economic activity in British Columbia that they believe their efforts overseas have generated. I was wondering if that is formalized in any way and if any information is available to the committee on the amount of economic activity generated in British Columbia from overseas trade offices.

Hon. M. Harcourt: We can try to get that information for the member. We have a new approach to our agents overseas, to our trade reps, where it is performance-based: are they getting results or not? We could get the form of those contracts to the member.

Interjection.

Hon. M. Harcourt: Yes. That's part of.... They produce, or somebody else comes along. And I may say that it's been very therapeutic to see the excellent people we have: Dickson Hall in Hong Kong and Michael Craddock in Taipei. They have B.C. Trade as a client, but they also act for ancillary clients in British Columbia and are out hustling for us and hustling for those other clients. Instead of being junior diplomats, we let the embassy do that. They are the diplomats. We work very closely with their sectoral trade people, and I think we're finding the right balance with the federal government.

We're not duplicating their services. We're aware of the fact that Canada is a large place, so the federal representatives are going to be taking care of all of Canada, which means we get lost in their purview. We're there to focus activities on B.C. companies and B.C. activities, and I think that approach is working.

We know, of course, the export sales in each of the countries. We have measurements of each of the particular programs. We can give you the information, for example, on the Canadian Comfort Direct and the very large increase in sales over the last three years. I can get you that information on the results. Most of the increase has been here in British Columbia.

F. Gingell: The Premier used a term earlier that when a program didn't work it was eliminated. I hope that when they were in St. Petersburg there wasn't any two-way exchange of ideas on the ways of accomplishing some of these things.

I have come to the end of the questions that I have on B.C. Trade.

As you can probably tell, I am a little critical of the financial statement presentation. I would like to suggest to the Premier, and through him to B.C. Trade, that the financial statements in an organization like B.C. Trade should be much more focused on trying to tell the story of what is happening. I guess it's got to be there, but we're not interested in how much you spend on buildings, salaries and professional fees.

It's not as important as ensuring that the story that sits in the financial statements in the notes tells us how many guarantees were given, what the volume was and the dollar volume in sales that resulted from these things. This annual report is a useful tool for B.C. Trade, not only for overseas but more so in being used to ensure that British Columbia's manufacturers are aware of the opportunities and the types of things that B.C. Trade does. Perhaps that could be borne in mind a little more when the financial statements are prepared.

I'm very sorry that Mr. Stafford missed his helijet, but I thank him for the responses.

R. Chisholm: My first thing is through to the Clerk, and that is a definite yes on the note he sent me. My next is through to the Premier.

There are obviously some exciting things happening with B.C. Trade internationally, but I'd like to get a bit more mundane and closer to home, and say that many political and economic minds believe that there is a serious problem. Of course, that is with the trade barriers between the provinces. I've discussed this with your Minister of Agriculture, the Minister of Energy and Mines, and Small Business, as the minister who is sitting there will attest to. When you look at the difference between Alberta and British Columbia -- 14 percent in agriculture, for instance -- we definitely do not have level playing fields.

I know the Premier is going to the Premiers' conference in Newfoundland, and he probably has ongoing negotiations. I've heard from the ministers. I'm just wondering what the Premier has planned for the near future to try to bring these differences closer together so we are at least competitive within our own country. It's nice going abroad and developing these opportunities, but we don't seem to be doing too well at home. I think we're a great hindrance to ourselves in that particular aspect. Maybe the Premier would like to comment on what he foresees happening in the next little while, and at the Premiers' conference, in reference to this subject.

Hon. M. Harcourt: I think we have made great progress in getting rid of a lot of the trade barriers between provinces. Some of that came down in the GATT round, some through the trade agreements with the United States, and some through the elimination of provincial trade barriers that the first ministers agreed to a couple of years ago and set a deadline of last summer to eliminate. We think this area, which is being described as a $6 billion problem in a $700 billion economy, is exaggerated, frankly, because over $5 billion of that $6 billion results from marketing boards and issues that are being dealt with through international trade bodies.

The amount of real interprovincial trade barriers is about $700 million, tops, and a significant portion of that amount is not procurement. It is some of the other provinces' investment incentives, which I disagree with philosophically, where you're bribing companies to come, distorting the market and paying business to come to your province. I think that seeing who can give the biggest bribe to business to come is not private enterprise. That's an area where we have asked for investment protocols so that the provinces agree to get rid of that sort of activity.

I think we have come a long way in opening up the procurement between provinces and in eliminating the trade barriers. I think it's now a very modest part of our economy -- a couple of hundred million dollars out of a $700 billion economy.

[8:00]

R. Chisholm: I'm glad to hear that the Premier thinks this is a modest problem with the economy, but with agriculture, as I know after research, there's a 14 percent difference between the farmer in Alberta and the farmer just one mile away in British Columbia. That is a definite disadvantage for British Columbia farmers when you come down to talking

[ Page 16480 ]

about inputs and outputs, for instance. I still think there is some area for the Premier to negotiate. Will that subject be brought up at the Premiers' conference in Newfoundland this year?

Hon. M. Harcourt: Yes, it has been brought up, and it has been discussed by our Minister of Agriculture. A lot of this is because Alberta has had a very fat bureaucracy and some very rich subsidy programs for their farmers. That's where the 14 percent comes from. British Columbia traditionally has had a leaner administration and fewer of those giveaways. You can look at it as a disadvantage, or you can look at it as us being more entrepreneurial, with an agriculture industry that is therefore fitter and leaner for the changes that are happening through GATT, dealing with subsidies.

These are areas that our Agriculture ministers have been pursuing. I think that through the budget process in Alberta, a lot of those are being eliminated, and they are being cut out in a number of the other provinces too, as governments try to trim and cut back.

R. Chisholm: I have just a couple of comments for the Premier's estimates on behalf of my constituents in Chilliwack. First is a positive comment. I want to publicly thank the Premier for his personal interest in the problems not only of the Chilliwack region but also of all regions in the province when he gave his personal attention to the matter of CFB Chilliwack and the overall state of the province's emergency preparedness. The Premier and I have had a number of discussions over the past few weeks about the question referenced, in and out of question period, and I haven't had a chance to thank him. I wish to do so now.

As I was listening in my office a few minutes ago to the Premier's debate with the member for West Vancouver-Garibaldi, he listed the things he would be raising at the upcoming Premiers' meeting in Newfoundland in August. There was something I didn't hear him mention. Without mentioning any plans you have at the moment to prepare for that meeting with some homework here in British Columbia, I wonder if you would like to amend your list a little bit and add emergency preparedness and the funding to the provinces of that. Maybe the Premier would like to make a comment.

[S. O'Neill in the chair.]

Hon. M. Harcourt: There are some very important areas that I am going to be bringing up at the annual Premiers' conference in Newfoundland this August, particularly around health care and funding for medicare and the Canadian social transfer program -- which is really a way of saying major slashes of federal cash contributions to those programs and the impact of off-loading. Part of that impact, as the member for Chilliwack mentioned, is the closing down of CFB Chilliwack. The member has raised some very important questions about our ability to have armed forces on the ground here in British Columbia to deal with floods, earthquakes and other disasters from either natural or human causes.

I have attempted to assist the member to meet with PEP, the emergency preparation people, to see what their concerns are about losing the Chilliwack base, the mechanized unit and some of the other resources there. I hope to continue that work with the member and with the mayor in Chilliwack to see if we can start to close in on the impact of the federal closure of the Chilliwack base.

And yes, that is part of the off-loading that I have been talking about, which we're facing here in British Columbia: the off-loading of billions of dollars that has happened between the previous federal government and this federal government.

R. Chisholm: My last question to the Premier is just a comment for his attention. One of your government's strong suits has been the environment. I personally think that it will be seen for some years as a legacy of this administration.

But although your government has made some progress in air quality through AirCare and other initiatives, we still have a problem in the central and upper Fraser Valley. I have spoken to the Minister of Environment and the former Minister of Environment, and both of those ministers over the last number of years have admitted, for instance, that there have been an extra 33,000 visits a year to hospital emergency wards due to asthma problems because of the pollution in the valley. The minister reported that there were an extra 2,800 deaths in the Fraser Valley due to this problem.

And that hasn't been reported for one year; it has been reported for a couple of years now. The former minister admitted, too, that agriculture in the Fraser Valley was down by $75 million due to the pollution in the valley. It used to be that you could see Cheam Peak almost every day of the year. Over the past five years, residents and visitors to the region have been lucky if they can see it for more than just a handful of days. Mr. Premier, we need more action in the Chilliwack area on cleaning up our air.

I've introduced for the fourth year in a row a private member's bill on ethanol use to help clean up our air. We never get around to debating it. Mind you, we study methanol, which has been thrown out in the States. We study natural gas. We study propane. We study the electric car, which we don't have the battery technology for. But in the meantime, over that four years this problem has gotten worse.

It is a matter of mandating ethanol into the fuel, and we will decrease the pollution by up to 35 percent. I simply ask the Premier, the next time he's flying over Chilliwack, to have a look for himself. Then come back to Victoria and read my bill. Ethanol mixed with gasoline would do the trick in the short term at minimal cost. It would help provide jobs in the Fraser Valley. You could legislate with a sunset clause to kick in when other solutions are in place. You could even implement it for just one or two regions. But it would be a great step.

I'd like to ask the Premier to look into this situation, because there's no necessity to have these 2,800 deaths. There's no necessity to have this extra burden on our health care system. There's no necessity to have agriculture down by $75 million -- especially when you take a look at ethanol: you can produce it from grains. There are corporations out there that just want to produce it for us if they had somewhere to sell it. It is a proven commodity. It's been used in the States, and they've run trillions of miles on it. It's used in Brazil 100 percent. It is part of the Green Plan for Canada. And the pluses go on.

It is only a temporary step. But it is a temporary solution until we finally come up with zero emission or a solution that

[ Page 16481 ]

will cut pollution drastically. In the meantime, it could save an awful lot of lives that we see being dispensed with. These people should never have died. Unfortunately, because of our lifestyle and because of the geography, we have this problem. For four years now we have not addressed it.

Maybe the Premier could give me his word that he will look at the bill, look at the situation and talk to his Environment minister, because every Environment minister he has had has stated the same thing to me. Yet we started this in 1992, we're in 1995, and we still do not even have a temporary solution. And people are dying.

Hon. M. Harcourt: I'm a masochist, because I have read each of the Hansard reports just out of curiosity to see what is happening when I'm not here. I did read, the other day, the member for Chilliwack's questions to the Minister of Environment about ethanol, his bill, the 2,800 deaths from the air pollution problem in the Fraser Valley and the $75 million of agriculture that was lost. The minister, as you're aware, commented that we do have a very active clean air policy.

You're right: it is a very serious health issue. There are some doctors I've talked to in the Abbotsford-Chilliwack area who know certain patients are going to come into their office, when they look out their third-storey window and can't see the mountain because of the air pollution. They know that some of their patients who have asthma, emphysema or breathing difficulties are going to be in their office, suffering. So it is a serious problem. Greater Vancouver.... As a matter of fact, the Georgia Basin is a lot like the Los Angeles Basin.

Chilliwack, Matsqui and Abbotsford are like Riverside and Yorba Linda in Los Angeles. You get the ocean breezes pushing the air pollution off the freeways and settling over a community, trapped by the mountains. Then the air on a sunny day in an inversion traps it even more.

So we're very aware of the member's constituents' problems from air pollution. That's why we have a program to take old clunkers off the road and have them compacted. That's why we have the AirCare program, which is starting to have an impact. That's why we brought in the clean air legislation to get rid of the beehive burners and deal with some of the other burning problems. That's why we are looking at cleaner fuels -- and we have looked at ethanol. I am aware of your bill.

That's why we have a substantial investment in Ballard buses, which is the leading technology in the world on hydrogen fuel cell buses in particular. It's not only in production but it's in operation -- one bus in Vancouver and another in Los Angeles. We're hoping to go to the next stage -- to ten buses each in operation -- to be able to get a better trial out of it.

We are working with the auto industry on auto emission standards -- not exactly similar to Los Angeles, but close. And voluntarily now, the industry and the auto dealers are working very closely with us.

To conclude my remarks, I am expressing some support and sympathy for what the member is talking about. We have looked at ethanol. The problem is that the subsidy you have to offer -- and we tried it up in the Peace with some of the wheat producers -- in terms of a decreased fuel tax is very substantial to the treasury to make it economical. If the member has an answer as to how ethanol can be competitive with methanol, natural gas and specially treated gasolines -- the cleaner fuels that companies are coming up with -- I'd be more than glad to take that forward.

[8:15]

R. Chisholm: Hon. Premier, I don't think we have the time to wait out all the testing that's going on. For instance, if you take a look at the Detroit newspapers, they reported -- and I quoted it to your minister -- that the electric car was going the way of the scrap heap, as far as the Governor of California was concerned. So it will be a long time before we have that. If we take a look at propane and natural gas, you do have pollutants, and they are non-renewable fossil fuels.

When you talk about subsidizing the farmer, I don't think that subsidy would be necessarily all that great, especially when you consider that agriculture in the Fraser Valley is down by $75 million. What is that worth to the coffers? What are 33,000 visitations to the emergency wards at the hospitals worth to the coffers? When you start adding all of these things up and pricing them out, your subsidy is minuscule. On top of that, we haven't even talked about the 2,800 deaths every year for four years which are admittedly due to this problem.

My point is that if we had put it in temporarily with sunset clauses and withdrawn it when you had a final solution to this problem, how much money would we have saved in the meantime, and how many lives? So I don't think we can't just sit back and say: "Just let it ride." Like I said, people are dying, and there are reasons for it. Maybe sometimes we have to bite the bullet and take a little extra hit for a short term until we come up with a solution.

Hon. M. Harcourt: Hopefully I was being clear when I said that I have some sympathy and support for what the member is talking about and that I would be more than pleased to take up his concerns and have him meet some of the Ministry of Environment officials. We would like to get a pilot project going. We looked at it in the Peace and we came very close. It just doesn't quite make it, but I'd be glad to have a fresh look at it.

J. Weisgerber: I hadn't intended to get in on an ethanol debate, but I think the government is making a serious mistake if it carries through with its announced plan to phase out the exemption of road tax for alternative fuels. The Premier will recall that in the 1992 budget there was a planned five-year phase-out, or a decision to start in 1997 with a phase-in of road taxes on alternative fuels, including ethanol, natural gas and propane. I think that's a fundamental mistake. I believe that today you're starting to see a big resistance built into conversions to natural gas and propane.

I don't believe we'll ever get an ethanol industry in British Columbia if we don't hold out some substantial offer of tax relief, and there are going to be new ethanol plants built in western Canada. I think, as the member properly points out, that we should weigh very closely the costs and benefits of maintaining an attractive tax environment for ethanol.

I came back because I was listening with much interest to the discussion between the member for Powell River-Sunshine Coast and the Premier about aboriginal issues. Let me say that I agree with the member's comments with respect to Sechelt. It seems to me, as the member pointed out, that the experience with self-government -- and there are flaws in that -- has been a very positive one. The fact that the whole question of self-government has been taken off the table, if you like -- or at least resolved in the vast majority -- and the very good starting position the Sechelt have put forward in

[ Page 16482 ]

terms of their comprehensive claim make it a natural to move forward. I say that because I understand from the Premier that everyone seems to be heading in that direction, and I certainly support that.

What I didn't agree with were the discussions around Adams Lake, because I don't agree with the member for Powell River-Sunshine Coast or the Premier that this issue around the right-of-way, and the lack of proper gazetting or recording of the right-of-way, is simply a problem for the federal government. The federal government may well have been negligent in not properly recording the agreement that was reached, but the Premier knows that's a situation that has existed not only at Adams Lake, Green Mountain or Duffey Lake. There are literally hundreds of areas around the province where this issue exists because of a lack of attention over time by bureaucracies.

It seems to me that the province does have a legal remedy. To the point, when the province transferred the land to the federal government for the creation of a huge number of reserves in this province, under something called order-in-council 1036, it did provide for something called resumption. Resumption allows the province to resume or expropriate land for road rights-of-way or utility rights-of-way, up to 5 percent of the total amount of the land transferred for reserve purposes.

It seems to me that at Adams Lake -- and the Premier may want to confirm the details, but this is my understanding of it -- the road right-of-way negotiations were concluded, an agreement was made and alternative lands were provided by way of compensation for the road right-of-way, and all that was missing was the federal government's gazetting of that right-of-way. If that's the case, and I believe it is, then there should be a process by which the province can clear the title to the road right-of-way, and that's resumption -- expropriation.

These negotiations have been going on, and maybe could continue to go on, for years, but I believe there should be a clear message coming from this government that when a blockade is up, when a road is blockaded, and when public passage is interfered with or hampered because of a blockade and the government is unable to get an injunction to bring the blockade down because of a difficulty with a title, then the remedy is resumption. So my question, first of all, to the Premier is: does he recognize that resumption is outlined under OIC 1036 and is a legal remedy that's available to the province, whether it be at Adams Lake or in other areas around the province?

Hon. M. Harcourt: There are two issues that the Leader of the Third Party talked about. One is the Sechelt and the successful self-government model that is in operation there. It's not perfect, but certainly from all accounts it is operating quite well. I have spoken to the mayor of Sechelt, and he has a good working relationship with the chief and the aboriginal people in the Sechelt area. He says that that is one model.

There are others that will come out of the treaty negotiations, and we've said very clearly that we are quite prepared to look at governance as part of the treaty table, rather than having two separate tables that may or may not meet somewhere down the line, as is being proposed across Canada. We don't think that is going to be very effective in British Columbia; they should both be dealt with together, comprehensively.

The Adams Lake situation.... It is unfortunate that since 1982-83, the province has been trying to resolve this matter. It would have been a very simple process if the federal government had just passed an order-in-council. This is a problem that existed during the Leader of the Third Party's tenure as the Minister of Native Affairs. The present Minister of Aboriginal Affairs has been writing, pleading and visiting, trying to get the federal government to do the same thing. It's a complicated issue. It's made more complex by the courts and the court decisions now.

OIC 1036, resumptive power, is an area that we are discussing at the policy tables. We have a process in place to deal with individual bands and nations. The Leader of the Third Party has correctly pointed out that there are about 400 of these trespasses that haven't been resolved across the province.

I guess it's a judgment call. Sure you can send in the cavalry and use 1036. But what's the reaction to that, what's the response to that? Does that encourage people to sit down and peacefully negotiate these situations or not? I think that is the tricky and complex climate we are in here in British Columbia. We are trying to encourage people to come to the treaty table and to not use unilateral or arbitrary action -- provocative action. I think we are starting to succeed, but it is a difficult and complex issue that the Leader of the Third Party has rightly raised.

J. Weisgerber: A couple of points. The Premier says it's being discussed at policy tables. I'm not sure whether that refers to policy tables within his own government or with first nations or with first nations organizations. Perhaps the Premier would clarify that.

I don't believe, and I've never believed, that resumption should be used arbitrarily, that resumption should simply be the remedy for the 400 or so specific issues that have been under negotiation not only with Ottawa but with the bands. It's important to understand that there have been ongoing negotiations, most of them conducted -- as the Premier must know -- by the Ministry of Transportation and Highways. As long as those negotiations continue and as long as there aren't illegal activities -- there aren't blockades -- then I don't believe resumption is the proper mechanism to use.

I believe that sooner or later -- and it happened.... The Premier likes to raise the issue of Mount Currie, Duffey Lake. Indeed, we did use resumption at Duffy Lake -- one of the few times in the history of British Columbia that it has been used. But when a blockade is in place, when the parties are intransigent and there isn't any movement, I believe the province has an obligation, for the benefit of its citizens, to use the tools available. I don't believe it's a provocative action.

When someone has blockaded a road and held people at ransom over a period of time, I don't think it's provocative to take legal remedies. I think that people considering blockades -- aboriginal people or others -- must understand that there is a price to pay for that action.

With respect to bands using blockades on roads where the gazetting is in question and where injunctions are not available, I believe that under those circumstances -- such as the one at Green Mountain, the one at Adams Lake -- the province has a clear obligation to use those remedies which were made available to it in order-in-council 1036. But let me say that this is a debate that I don't expect to win here today.

I do want to get on the record, though, that there is a remedy: resumption -- order-in-council 1036. It is available. When the province or individuals are unable to obtain an

[ Page 16483 ]

injunction because of improper gazetting, that is a remedy. Whether one wants to use it or not, it's a remedy that's there and available for any of those reserves where the land was transferred under order-in-council 1036. If the Premier agrees with me on the availability of resumption as a remedy, then I would be prepared to move on. I don't think it's something that either one of us can stand here and win a debate on.

Hon. M. Harcourt: The policy tables are with the summit, the Union of B.C. Indian Chiefs and also inside the government, through the planning board and working groups that we have working on aboriginal issues. It is an area that has been very intensively looked at, studied, talked about and worked on. What we need to do is anticipate the emerging issues that create the tensions that lead to roadblocks, by doing more proactive work with aboriginal and non-aboriginal people. I think that would go a long way.

No, I don't think it's a win-lose or an either-or. What we have attempted to do is deal individually with individual bands and aboriginal nations to anticipate these sorts of problems. We have had provincewide discussions, through the summit and the UBCIC, where we agree to disagree. They have said: "You get rid of 1036, and then trust us to be trustworthy." I am prepared to trust them, but I don't think that would be prudent. So we've reached a standoff at the provincial level on both tables and are dealing with it on a more individualized basis. My minister and I have made it very clear that we will not negotiate while blockades are up; that is not acceptable.

We've had a good discussion of a very complex topic. I will certainly take under advisement the advice and the suggestions that the Leader of the Third Party has given.

[8:30]

[D. Lovick in the chair.]

J. Weisgerber: Just to conclude, the Premier came very close, but the Premier will acknowledge that the province still has the remedy of resumption where issues arise on reserves originally transferred under order-in-council 1036.

The Chair: The Leader of the Third Party.

J. Weisgerber: Thank you. I was asking a question, and I was hoping that the Premier would acknowledge it.

Hon. M. Harcourt: If the Leader of the Third Party is asking if 1036 is still in existence, the answer is yes. Therefore, because it's in existence, it is available. What we are trying to do is move away from the exercise of that where possible and work through negotiations, treaties, interim measures and other means to regularize those roads and other alignments.

M. de Jong: There is a distinct possibility that this will be the last opportunity before a provincial election for the hon. Premier and I to have an exchange on a number of matters.

An Hon. Member: You won't be here.

M. de Jong: The Government House Leader suggests that I won't be here, and that is a distinct possibility as well. If it occurs, I have no doubt that he will join me on the unemployment line and help to secure employment for me.

I would like to talk to the Premier and canvass him on a couple of issues relating to constitutional matters, some of which have been canvassed previously. One of the issues the Premier addressed was his expectation that there would not be a constitutional round of negotiations in the months leading up to the Quebec referendum, and indeed in the months following that referendum. However, he does say that British Columbians aren't satisfied with our present federal arrangement, and therein lies a certain inconsistency.

I should say that I wholeheartedly accept some of the other comments the Premier made with respect to his commitment and that of his government to ensuring that the country remains unified and that steps be taken to promote that concept wherever they can. But I can't help but think that the Premier is adopting an approach and a strategy that is more politically convenient than helpful in achieving that goal. He might be right when he says that British Columbians aren't in a mood to discuss constitutional matters. But I'm afraid that doesn't provide him with the excuse not to embark upon those negotiations.

In fact, the day is coming when we will be presented with a situation in which we have to respond. Far from finding ourselves in a position, as we did several years ago when we were caught off guard in attempting to ascertain a position and exposing ourselves -- and this is where the Premier should be particularly concerned -- and himself to the charge that he hadn't consulted with the population to ascertain what their position was insofar as determining the relationship with the rest of Canada and Quebec...that we commence those discussions now.

My initial question to the Premier is: why the reluctance on his part to embark on those discussions within the province to get a sense for what British Columbians' vision of our relationship with the rest of the country is? We know that they have rejected one vision in the last referendum, yet we're no further ahead. We know the day is coming. We know that a decision will be made in Quebec, and regardless of what that decision is, it will give rise to calls for another round of constitutional negotiations. Though it may be politically convenient at the moment to avoid those discussions here in British Columbia, my submission to the Premier is that that is not ultimately realistic or wise.

Hon. M. Harcourt: I think the people of British Columbia are very clear that they want political leaders in this province and this country to focus on issues that are close to home -- issues such as jobs and investing in the training, infrastructure and natural resources which are going to secure prosperity. If we're going to have discussions between governments, it shouldn't be around constitutional arrangements; it should be about how we can cut down duplication in government -- how we can cut down waste between the federal and provincial governments. I think we would have far more credibility with the public in that area.... And there is a lot that is taking place.

At our first meeting, the Prime Minister raised the issue of getting rid of waste and duplication, and six months later we had an agreement on 14 different areas where we were going to synthesize into one environmental testing lab in British Columbia for agricultural testing, meat inspections, poultry inspections, fish inspections -- food inspections of all sorts -- and where we were going to consolidate health issues. We had a timetable for that, and I am quite prepared to give

[ Page 16484 ]

the member access to this first phase of getting rid of waste and duplication between the federal and provincial governments.

The second phase, I think, is on hold until after the Quebec referendum. The work is taking place to deal with duplicating forestry, mining, energy, environment and a whole range of federal bureaucracies that are in provincial jurisdictions. They are clearly into

section 92. There are 8,000 people, for example, in the health department in Ottawa -- doing what? There is a whole series of areas that are far more fruitful: in either the quiet work that's going on now or the reductions in staff that are taking place at the federal level and will be accelerated, in my opinion, after the referendum in Quebec. That is where we can save our taxpayers money, get rid of the major irritants -- such as duplicating bureaucracies, which taxpayers rightfully get upset about -- and deal with the changes that I think British Columbians want.

We want to have effective training programs. We want to have one-stop shopping for business services -- and we do have that in British Columbia now. Small Business and I announced this just recently at what used to be the CPR station, now called the Station. I believe that that is where we should put our effort: looking at one tax collection regime for GST and PST and the work that can maybe take place in that area, without landing another billion dollars on consumers in that merging or harmonizing of those taxes.

So I don't disagree with the member, but I certainly don't think that the people of British Columbia want to have a lot of hypothetical discussions this fall about "what if?" I think they're very clear; they've said: "We want Canada to stay united; we want Quebec to stay." The choice is separation or not, not some fuzzy "stay-in-Canada-but" or "get-out-of-Canada-but." I think we should let that take place and support the federalists in Quebec where the referendum is going to take place. And I believe they will be successful.

M. de Jong: I don't quarrel with much of what the hon. Premier has said, but he began earlier in these debates by acknowledging that British Columbians are dissatisfied. The things that they're dissatisfied with relate to some pretty fundamental questions regarding our federation, the division of political powers and things like the Senate. Those are fundamental issues that extend well beyond some of the legitimate economic concerns that the Premier has identified.

The other frustration that I sense in British Columbians relates to the fact that we are perceived in this province as constantly being on the defensive in these negotiations, as constantly responding to another agenda, to another schedule. In this case, here we are again: we're planning our strategy around a Quebec referendum. We will begin to formulate our plan and our approach after that. The fact of the matter is that there is dissatisfaction in this province right now, today, regardless of what happens in Quebec.

I don't think the Premier can simply say that we're going to wait and see, because he's already acknowledged that British Columbians want changes. Why would we postpone the discussion that we as British Columbians need to have? No one is prouder of this country and no one strives more to preserve its unity than I, and I know that the Premier feels the same way about it. But for us to be back on our heels reacting on the day after a Quebec referendum vote, where, depending upon what the result will be, there will inevitably be demands on the Premier -- if he remains in office at that time.... Why would we wait?

Why wouldn't we initiate that discussion with British Columbians, those who are prepared to involve themselves?

It strikes me as making sense to avoid that very same criticism that was levied at the Premier in the last go-round -- that British Columbians weren't listened to. Yes, the majority of British Columbians may be disinterested, but that's no reason for the Premier to chuck his responsibility. That's where the leadership comes in -- to remind British Columbians that this day is coming. It's coming sooner than they think. It's time for us to begin thinking about these issues.

Just because the Premier can hide behind a poll and say the majority of British Columbians don't want to talk about it -- that's not good enough. My question to the Premier is: in the face, perhaps, of unfavourable polls on the issue, is he prepared to show that leadership and to initiate that discussion and debate in the weeks and months leading up to events in Quebec?

Hon. M. Harcourt: I want to make it very clear that I and British Columbians are busy bringing about changes. We're not waiting for anybody. The people who want to have a referendum on Canada aren't here in British Columbia.

We've already made a commitment here in British Columbia to Canada. We've already said that you're either in or out of Canada; there's no squishy in-between. British Columbians are crystal-clear. Whatever their politics, wherever they live in this province, I don't think there's any need for a referendum on that. It is almost self-evident that that's the position of the British Columbians I talk to, whether you see polls or the thousands of people I meet either directly or through the media and communications available over television and radio shows. It's crystal-clear that British Columbians not only are thinking and have thought about it, but agree on the kind of Canada they want.

The changes they want are very specific. Through the three summits I've had, the various forums and working groups on economic development and international trade -- the first summit I had at Pearson College in 1992, the second summit on skills and training, the third summit on partnerships and cooperation between the public and private sector -- the various groups in our province and British Columbians are very clear what they want to see happen. They want to see a plan. That plan is here -- "Investing in Our Future: A Plan for B.C." That is going to strengthen Canada if British Columbia keeps the leadership role in our economy, our land use decisions and our deficit and debt management.

I hope, with the support of the opposition, to encourage the federal government to carry out its deficit plans, not on the backs of British Columbians but by cutting duplication and waste that I've just described previously.

I believe -- if they take up the $9.3 billion of recommendations, which I have given to the Prime Minister and the Minister of Finance, of cutting out subsidies, waste and duplication -- that we can take care of the real business of the people of British Columbia, which is jobs, getting our financial house in order, dealing with the conflicts in our forests and making sure we're ready for the twenty-first century with the skills, natural resources and transportation and information highways that we need.

So no I think British Columbians know what they want, and we're doing it.

[ Page 16485 ]

[8:45]

F. Gingell: Mr. Speaker, I seek leave to make an introduction.

Leave granted.

F. Gingell: It's my pleasure to introduce Mr. Tex Enemark, who, as we all know, was a deputy minister. I know that he's missing, right at this moment, as it's getting late on a Thursday night in front of a holiday weekend, the thrill he used to have at being in the House and sitting with his minister. He misses it terribly. So I'm pleased to see him back. I ask all members of the House to make him welcome.

M. de Jong: I'm saddened somewhat by the Premier's response. It's not because I doubt his sincerity and commitment to maintaining a unified country, because that is wholeheartedly sincere. But I am saddened by what I see as an unwillingness to confront the issue we are destined to be faced with. The justification for that can only be political expediency.

It will arise in other ways. It will arise insofar as the manner in which land claims and negotiations are concerned. Some of the discussions we have heard and some of the terminology we have heard the Premier use speak of the possibility of a third constitutional level of government. Is that something we are contemplating? Is that something the Premier is very confident that British Columbians are in favour of?

We have heard the Premier speak of land transfers that would fall outside the Crown tenure and outside the traditional fee simple concept that we have within our existing Torrens system. When we start talking in those terms, and when you're taking land that is no longer subject to any form of expropriation, for example, that falls outside of our fee simple land title system, we're now speaking in terms of sovereignty. I can't think of any other word that you can apply to that sort of process. These are constitutional matters that have constitutional implications.

The Premier speaks with great confidence that he understands what British Columbians want. I confess that I don't have the great insight that he apparently does. I don't have that ability to interpret the results of the last referendum with the clarity that the Premier apparently can. That vote came about for a whole host of different reasons. The Premier speaks of the people in the province as some sort of monolith that he understands, and that is looking at these things from a single perspective. He must surely know that that's not true.

When the day comes, as it will -- in a matter of months, not years -- when the Premier, if he's in that office, is called upon to participate in these negotiations, I will rue that day, because the first thing he's going to say is: "Well, I need to get a mandate from the people. I have to canvass with British Columbians on how they feel about questions like native sovereignty, a third constitutional level of government." This is my question to the Premier: how can he be so confident?

What data, what insight, does he have that the rest of us don't have that allows for him to proceed into what will likely be the single most important round of constitutional talks that this country will embark upon without, in my view, any clear indication of where British Columbians want to go?

Hon. M. Harcourt: This is an interesting and important area of discussion, but the member is mixing up two or three issues at once. First of all, he's dealing with the question of aboriginal negotiations, self-government and the status of lands. We're going to deal with that here in British Columbia through the treaty process. We're the first government in B.C.'s history to deal with these at the treaty table. We're not waiting for Quebec's referendum. Over the last three and a half years, we have put in place the ability to sort out these issues, including governance, with the aboriginal people at the treaty table. That has nothing to do with what people in Quebec are doing.

Secondly, the people in Quebec are the ones who are having the referendum, not the people in British Columbia. I haven't had anybody send me a petition saying that they want to separate from Canada. British Columbians are the most loyal Canadians; in fact, you can see it in all the public opinion surveys that are being done and, even more importantly, when you talk to British Columbians. So that's not at issue. We're not the ones who are thinking about or who may have a clear question.... I hope there is a clear question in Quebec. I hope it's a straightforward question -- "Separate or not: yes or no?" -- and not a squishy one that won't settle anything.

But it's the people in Quebec who are going to have to decide on that. We have already made our decision. We don't need a referendum in British Columbia about Canada. We're Canadians; we're loyal Canadians. That doesn't mean we don't want changes. We can negotiate the changes. The Prime Minister has said this, and I agree with him. We can negotiate these changes without having to change the constitution one iota. Through the flexibility of our federal system, and through administrative and political arrangements and will, we can bring about these changes -- and we are.

I have just given two or three examples of where we're getting rid of waste and duplication and interprovincial trade barriers, and we're providing one-stop shopping for small business and a series of other changes. That's by far the most fruitful way to go about changing Canada: not at the constitutional table but at the political table, by making political and administrative changes.

I would like to just finish this by saying that it's too bad Tex Enemark left. He was an old friend of mine, who is probably saying to himself right now: "My God, please don't start another round of constitutional talks." I'd much rather get talking about mines and other resources that we can get going here in British Columbia.

M. de Jong: I suspect that this is a debate that I am not likely to reap much success in, though I say to the Premier that I think he is adopting a politically convenient stance but not a realistic one.

During the course of these estimates debates and in question period today, there have been some references made to some documentation that found its way out of the Premier's Office or out of cabinet offices. I was interested to hear the Premier's response. While he recognized the existence of the document, he went to great pains to point out that he disagrees with all of the findings.

Where the cabinet briefing document suggests that it's not clear if the referral-welfare-to-work part of Skills Now has been effective in placing people in jobs, he says: "No, that's not true; I'm entirely confident that it has." Where the document says that the critical link between Skills Now, Forest Renewal B.C. and B.C. 21 has not happened

[ Page 16486 ]

to any degree, the Premier says: "I don't agree with that; quite the contrary." Where the document says that it's not clear what the link is among community skills centres, Skills Now and other adjustment strategies, the Premier says: "That's just not true."

Before we get to the substance of some of these issues, maybe the Premier could indicate to the committee to what extent the resources of his office were utilized, personnel and otherwise -- if any -- in the production of that recommendation.

Hon. M. Harcourt: If the Leader of the Opposition and the member for Matsqui are wondering why this side of the House was puzzled about this document, it's because none of us have ever seen it. It has never been to a cabinet committee; it has never been to any of our deputies.

It is a document that was prepared in March or April of this year. It was prepared by the cabinet planning secretariat staff. The authors of the report were asked by senior CPS management to pull together a whole range of critical comments that had come from the opposition, the media, citizens, public servants and polls about a whole range of these issues. These weren't staff opinions; these were taking the critiques of all of these programs -- not that we believe them -- and putting them into a document to get a sense of the vulnerabilities in terms of critical comments about some of our key initiatives.

That's why this document was so elusive; none of us has ever seen it. It's never been to a cabinet committee; it's never been to any of our deputies.

It drew material from files, Hansard, polls, letters and reports on relevant meetings. Staff were asked not to leave anything out, so that management would have a complete sense of the critique outside of the cabinet and outside of the government caucus of a number of its key initiatives, whether it's Skills Now, the forest changes, Forest Renewal B.C., B.C. 21 or our debt and deficit plans. The staff document was never presented to me, cabinet members, cabinet, cabinet committees or deputies. That's the reason that there was some astonishment at this document: we'd never seen it.

I hope that answers the member's concerns. I think the member should note that the introductory paragraphs say that the initiatives are progressing through implementation well and that actions to respond are adequate. That's why I was so vehement in my comments that I don't agree with those, because they're comments that have come out of the mouth of the opposition member opposite, and he's wrong. These initiatives are working, and they are found in "Investing in Our Future: A Plan for B.C." They're working very well.

M. de Jong: It's interesting that the Premier, again, is rather selective. It's a report he doesn't purport to place much stock in except for those provisions that are convenient for him to quote.

I'm a bit confused, and I must admit that my confusion stems perhaps from my relatively recent arrival here, and it may otherwise be genetic. The Premier has commissioned staff to produce a report. I presume that the Premier and the offices place some faith in the opinions of those staff, or they wouldn't have called for the report to be done in the first place; they wouldn't have asked them for their opinion.

When the Premier says that the report is simply a compilation of views taken from outside of government, that just ain't so -- the report contains a whole host of information. It talks of what the observations of the public are. The Premier is correct when he says the report includes that sort of information; that's certainly in the briefing document. But it also includes some very specific findings by the staff that produced the report.

Is the Premier saying that he has no faith whatsoever in the opinions of those who were involved in the production of this document? If so, what are they doing hanging around?

Hon. M. Harcourt: This report was not commissioned, not asked for. It was put together by some of the staff in the cabinet planning secretariat, and I described the sources. The vast majority of it was outside of government. There were comments in some cases from some of the ministries, but, by and large, it was opposition critics, media critics and some of the polling information. It was a staff report that never saw the light of day. It was an internal staff report that staff commissioned on their own. There was no commission in this report. It was not perused by me, any of my cabinet members or any of the deputy ministers.

[9:00]

M. de Jong: In a few short months, the Premier will have to make a decision about going to the polls; he won't have a choice. That will happen inevitably, whether he likes it or not. I suspect, when one looks at the present standing of his party, that he will postpone that decision as long as he can. But ultimately the decision will be made for him. When he goes to the polls, he'll be seeking forgiveness from British Columbians for a whole host of sins.

He'll be seeking forgiveness for the Vancouver land use plan, the communications plan that was released. Contrary to the information and the statements the Premier made initially that there would be no loss of jobs, British Columbians in the affected parts of the province got to read about the government's plans to limit the information that would be disclosed to them, to limit the damage that was going to be caused by the government's land use planning strategy.

He'll have to seek forgiveness from those British Columbians whose lives have been so dramatically affected by that whole process and by that act of deception perpetrated by the government, specifically and purposely, on those individuals.

He'll have to seek forgiveness for the Trumpy memo, that memo which confirmed that the Premier's own senior staff -- Treasury Board staff -- were telling him and his colleagues that their debt is unsustainable. After the Premier and the Finance minister have spent months and months spinning and spinning this line that British Columbia's debt was under control, it just wasn't so. It just ain't so, and no amount of spinning by the Premier is going to change that fact.

He'll have to seek forgiveness for his handling of the events surrounding the resignation of the former Minister of Environment. He'll have to explain to British Columbians why he waited until the very last minute, when he was backed up against the wall, when he had no choice, because the Law Society of British Columbia had rendered a decision that found his minister had contravened extremely serious trust guidelines that will preclude him from practising law for 18 months. The Premier has never answered the question about why he waited all that time, when the former minister acknowledged earlier in the spring that he had made a

mis-

[ Page 16487 ]

take. It took the Premier months to act on that information. We don't know if the Premier had the information. We don't know when the Premier lost confidence in his minister as he says he ultimately lost confidence in the former Minister of Government Services. The double standard is striking. We haven't heard from the Premier. We haven't heard him explain that difference, so he'll have to seek forgiveness from British Columbians for that.

He'll be seeking forgiveness from British Columbians about what we heard described earlier this evening as the clown hall meeting. I don't know if that makes the Premier the clown prince of politics, but it was certainly his clown hall meeting. He'll be seeking forgiveness from British Columbians for the money that was spent on that fiasco. He'll be seeking forgiveness from British Columbians on the NOW Communications fiasco, where audit reports confirm action taken by the Premier's own office to hide contracts with Mr. Struble in Washington, deliberately weaving a web of deception.

He'll be pleading for forgiveness from British Columbians. Though he sought to put this off for months -- years, in fact -- he will ultimately be pleading for forgiveness for the deplorable, absolutely unforgivable manner in which he and his government have handled the Nanaimo Commonwealth Holding Society situation. He won't get that forgiveness, because his conduct in all of those instances, particularly in the case of the Nanaimo Commonwealth Holding Society, is beyond forgiveness. It's absolutely deplorable.

Earlier in these debates I heard the Premier explain -- and he went through a fairly detailed chronology; he read his notes well -- how the minister, in his view, had done everything according to plan and had done everything right.

The one question he's never answered, the one issue he's never addressed directly is: why would a minister of the Crown, in possession of a report investigating an organization with direct links to the NDP, take that report to the Premier's own senior staff -- representatives of a cabinet committee and the secretary of the New Democratic Party -- and then excuse that behaviour on the basis that he didn't have advice from the Attorney General's department?

My question to the Premier is: doesn't he think that if a minister of the Crown needs advice to tell her that that's an inappropriate course of action, that minister is in the wrong line of work?

Hon. M. Harcourt: The answer is no. I have never gone to the public in an election seeking forgiveness. I seek a mandate. I sought a mandate based on a vision of the city I was in, the province I was in. I have done that through nine straight elections. I'm sure the young member will learn more about this in politics, and I hope he learns a lot more about law and the system of law we have. He seems to have forgotten it in this chamber. He's prepared to hang them and then try them. He said that in four of the things that he has mentioned here today.

He didn't have the courage to go out and attack the judge, with the privilege removed -- as he did a few days ago.... I think the young member from Matsqui has a great deal to learn about politics and law, and a great deal to learn about how you deal with and treat people, and I hope he learns it before the next election. I hope he is capable of learning what an appropriate way to deal with people is, and what an appropriate way to respect the administration of law in this province and our democratic traditions and institutions is, because he sure as heck hasn't learned it in the few months that he has been here.

M. de Jong: I'm actually quite pleased that the Premier raised the question period debate of several days ago, because I was absolutely shocked to hear what the Premier had to say. The reason I was shocked is that it was only a few short years ago that this Premier's cabinet ministers were writing letters to their constituents condemning the sentences that were being handed out by judges relating to the Clayoquot incident. Those letters deemed jail terms as being inappropriate. And what was the Premier's response then?

What was the Premier's response when it was suggested to him that his cabinet ministers had acted inappropriately? Well, the Premier said: "It's entirely appropriate for MLAs to acknowledge the feelings of their constituents."

Isn't the double standard rather dramatic? When I come into this chamber and suggest to the Premier that my constituents are upset and deem certain sentences to be inappropriate, I'm acting inappropriately and am somehow not abiding by the bounds of decorum in this chamber, but when his own members adopt that similar conduct, it's appropriate. And why is it appropriate? Well, we're us, and you're them. I think it's shameful. I appreciate the Premier's fatherly advice; I really do. I must tell you, though, that I take it with the proverbial grain of salt, given the source.

The Chair: The Government House Leader on a point of order.

Hon. G. Clark: I would just like to draw the Chair's attention to the fact that we are in the Premier's estimates. I appreciate that the Premier is responsible for many and varied things, but I don't think he's responsible for the actions of Provincial Court judges, and I think it's clearly out of order to stray into that territory in estimates debate.

The Chair: I thank the minister for his intervention. I have refrained from making many interruptions in the last five or six hours of this debate. I would point out that though the practice in the Premier's estimates is to allow considerable latitude, we have indeed been only very tangentially connected to the Premier's estimates for a considerable amount of time. I think the minister's point is well taken. I would ask that that be a cautionary note for all members who participate in this debate.

M. de Jong: I only make the point that the Premier raised the issue, not I. Since we are discussing conduct, we are discussing conduct within the Premier's Office. I think it's appropriate for me to ask him whether a double standard does exist, and whether it's appropriate for his staff, his members and himself to conduct themselves in a way that he now says is inappropriate for members of the opposition.

Hon. M. Harcourt: No, I think that there's one standard. I think the standard is that if you want to say these comments, then don't say them behind the privilege of the Legislature; say them out there. The comments about Clayoquot by the members he's talking about were said out there as MLAs, without privilege to protect them. The member for Matsqui didn't have the courage to do that. That's my only point.

The Chair: Can I suggest now that this intervention is to simply give notice that we have allowed that personal interchange to occur. I think it is over. Now we ought to get back to the estimates debate.

[ Page 16488 ]

M. de Jong: Thank you, hon. Chair. You say that with an air of finality that suggests that I would be ill-advised to....

The Chair: You would indeed.

M. de Jong: Information relating to the Nanaimo Commonwealth situation continues to hang like a millstone around the neck of the Premier because of the sheer hypocrisy with which the government and the Premier have addressed the issue. I should say, hon. Chair, that it's coincidental, I'm sure, that I make comments through you that in fact have come from you. It was acknowledged several months ago: "Part of our problem as a party is that we tend to be and have been rather holier-than-thou and sanctimonious. We have believed that New Democrats didn't do unpleasant and improper things. We have now discovered that we do."

Those candid comments, given fairly and sincerely, should indicate to the Premier the seriousness with which this situation is taken by members of his own party, who, I would submit, are unfairly tarnished by the cloud that hangs over the government as a result of this Premier's refusal to take firm and decisive action. For him to suggest that the problem is removed from his office, removed from his ambit, is just shirking his responsibility as both Premier of the province and leader of the New Democratic Party.

The Premier.... My question to him is: is he prepared to follow through on an undertaking he gave to British Columbians months and months ago that they would have an opportunity to get to the bottom of this sordid affair? He's had forensic audits; he's had internal reviews. We haven't seen any of it. What is clearly required now is a full and public inquiry, so that those members of his caucus who aren't involved will have the satisfaction of seeing their names cleared and having this cloud removed that is hanging over them now.

Will the Premier commit to embarking upon that single process, that single procedure, that can remove this cloud from so many of his own colleagues in this shameful affair in British Columbia's political history?

[9:15]

Hon. M. Harcourt: No. We will let the special prosecutor complete his work -- the special prosecutor who has just been appointed. Hopefully, we can have the report by Mr. Parks released as quickly as possible. I'd like to see it as soon as possible -- and so would the people of British Columbia -- in order to clear the air of the purple rhetoric coming from the member for Matsqui: the accusations and aspersions that he's casting at people widely and that hit the net that he flings out so widely. I would like to see that report out as soon as possible.

M. de Jong: Earlier the Premier offered me some fatherly advice. He may be interested to know that much of the advice, if I've taken any from him, comes from his days in opposition. Isn't that the sheer hypocrisy? To read some of the Premier's comments from his days in opposition, when sanctimony rolled off his lips like a valley preacher -- and I can say that, because I am from the valley....

The Premier was calling for the head of Bud Smith in two separate incidents: in the Doman incident and the incident involving the tapes. He was sanctimoniously demanding an ethical standard that he is so clearly unable and unwilling to demand of himself and his colleagues. For the Premier to say, "I'm content to let this matter lie; I'm content to let this matter rest with special prosecutors and forensic audits," just isn't satisfactory, because those weren't his comments. He's in the Premier's Office now. If he's demanding that standard from others, as he so obviously did in his days in opposition, what's happened since then? What's different except that it's him now?

The Chair: Shall the vote pass?

M. de Jong: I'm not surprised that the Premier doesn't want to talk about it. Every time he opens his mouth he digs himself a bigger hole. But this is the place for him to talk about it; this is the place for him to discuss an issue that touches the very heart of his office. It was his aides who attended the meeting, not mine. It was his party's secretary who attended a briefing to deal with a document that potentially implicated that political party. Did the Premier know about that? Did the Premier send those top officials to that meeting? I think that's a legitimate question. Let the Premier answer that: did he send those officials to that meeting?

V. Anderson: I rise in the Premier's estimates with a concern that we have shared for about 25 years. It goes back, the Premier will know, to inner-city days, 25 years ago in downtown Vancouver, when we were working together with the people of the downtown core who were concerned about the social services, the living conditions, the housing conditions and the legal conditions that were part of the community at that time. Unfortunately, I rise tonight to express the concern that in the last four years the conditions have become even worse; they have deteriorated in that same downtown core.

An Hon. Member: Wait till the Liberals' cuts get in.

V. Anderson: They say: "Wait until the Liberals come in."

An Hon. Member: The Liberal cuts.

V. Anderson: The cuts in services that have happened in the downtown core, the reality of the difficulties there, the social services which have decreased.... Ever since we had an opportunity to look at the Social Services program, we acknowledged that the present government inherited a program which was a mess. We asked the Premier on a number of occasions to do a study of the whole Social Services system in order to review it, reorganize it and reform it. But the Premier wasn't willing to listen or to act.

They kept saying that everything was fine, that things were improving, that things were getting better, until finally, by the force of public opinion, they had to have the Gove inquiry. Fortunately, they had the Gove inquiry, because that inquiry clearly said that the Social Services system was understaffed and that the Social Services system had asked people to do jobs beyond their training, capabilities and support.

I ask the Premier at this time why he has been reluctant and unwilling to take the measures that need to be taken to help the people not only in downtown Vancouver but in Victoria, Prince Rupert, Prince George and all around the province, whose conditions, income and actual purchasing ability have continued to decrease during the time of this

[ Page 16489 ]

government. I think it's fair to ask the Premier in his estimates why this has continued to deteriorate and why there has been no major attempt to cure the circumstances, as they have become worse day by day. I would be anxious to hear from the Premier in that regard, and so would the people of the community who are facing those circumstances.

Hon. M. Harcourt: As I said earlier, I have read all of the estimates in Hansard. I know that the mem