Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MAY 5, 1997

Afternoon

Volume 4, Number 15

[ Page 3061 ]

The House met at 2:05 p.m.

Prayers.

Hon. D. Miller: Joining us in the House this afternoon are some representatives of the Alliance Pipeline proposal. I'd like to introduce Dennis Cornelson, the president and CEO; Norman Gish, chair and director; and Jack Crawford, vice-president, public relations. I'd ask the House to make them welcome. They're proposing a modest $3.4 billion project, and we'll be talking about it later with them.

C. Hansen: In the gallery today are 17 students from Point Grey Secondary School. They are accompanied by their teachers, Jean Mickelson and Susan Bailey. Will everybody please join me in making them welcome.

J. Kwan: Today visiting us in the gallery are 42 residents of the Strathcona community. Their visit is organized by the seniors and family program coordinator, Mr. Nigel Ma, and Ms. Lily Chan, the family worker with children from low-income families at the Strathcona Community Centre. The seniors group is a very successful group in Vancouver-Mount Pleasant in ensuring that seniors are active and involved in our community. Will the House please make them welcome. I would also like to bring my greetings to the seniors in Cantonese as well.

[Cantonese spoken.]

J. Dalton: Usually I don't get up this early. But this morning it was 4:30, to catch one of two busloads of Handsworth students from my community. I guess we might say it's now a rare field trip that we went on today. I would like to, in particular, acknowledge Jim Adams, the teacher who accompanied the students; Dr. Len Henrickson; and Mary-Sue Atkinson, who many members will know is a very passionate person on urban streams.

Special thanks to the member for Garibaldi, who very kindly came and spoke to the students today, and also to our leader, from the riding of Point Grey. Mr. Adams tells me he used to babysit the leader and his siblings when he was a little bit younger.

As well, if I may, hon. Speaker, I'll make reference to one of the 80 students. I'd better do this, because she is my son's girlfriend: Ms. Jennifer Russell. Please welcome all of them.

V. Anderson: I'd ask the House to join me in welcoming 30 students who are here to study government and history. They are grade 11 students from Sir Winston Churchill Secondary School in my riding. Accompanying them is Ms. Choe, their teacher.

Hon. J. Cashore: I wanted to rise in the House at the first opportunity and tell the House about an event that happened in Toronto yesterday, where Jeremiah Shiang Cashore, my sixth grandchild, arrived. He is 8 pounds 5 ounces.

Oral Questions

FOREST INDUSTRY COSTS AND

INVESTMENT PLANS

F. Gingell: For the first time in British Columbia's history, vast forest resources are being termed a liability. The Canadian Bond Rating Service, in their review of MacMillan Bloedel's debt, stated that "the historic benefits of high-quality B.C. forests have become a liability, given the current high costs."

We all know that the Minister of Finance has worked long and hard, even if unsuccessfully, to portray deficits as surpluses. But can the Minister of Forests please tell this House why in only five short years the NDP has turned B.C.'s timber holdings from assets into liabilities?

Hon. D. Zirnhelt: I haven't seen the report that the member refers to, but I suspect it is a line by one analyst making a point. There are any number of forest companies that are turning a profit. The profits are up over this quarter last year. We are working with industry very closely to fine-tune the Forest Practices Code to work within the management regime that we have, to make sure that they can continue to invest in the forests of British Columbia.

F. Gingell: Last week, at MacMillan Bloedel's annual meeting in Vancouver, slides were flashed on the screen of new composite mills. They weren't in British Columbia; they were in Ontario and Pennsylvania. The president of MacMillan Bloedel said: "What you are seeing is the future of MacMillan Bloedel." Can the minister tell the House why in only five years his government has driven up forest costs so much that one of the oldest forest firms in British Columbia has now given up on job-creating investment in British Columbia?

Hon. D. Zirnhelt: I can't speak for the investment strategy of MacMillan Bloedel, which is a national company, but I do know that in terms of new opportunities, there are opportunities for new fibre to be cut in other parts of the province. In British Columbia, with the MDF plants and with finger-joining plants, we have made better utilization of the fibre. B.C. has recently seen over a billion dollars invested, with the Forest Practices Code in place, in the 1995-96 era -- about 1,000 jobs from new investment -- and we know that many other companies are intending to invest in British Columbia as they fine-tune their investment plans for the year to come.

FOREST RENEWAL PROJECT FUNDING

AND JOB CREATION

T. Nebbeling: During the last two years, the Squamish watershed committee has spent over half a million dollars of Forest Renewal B.C. funds to identify how they could improve the Squamish watershed. This committee has requested $1.4 million for watershed restoration; however, FRBC is only offering a quarter of this needed fund for cleanup. In fact, Forest Renewal B.C. told the Squamish committee that all watershed programs have been cut back.

Can the Minister of Forests explain why Forest Renewal B.C. is cutting back its commitment to displaced forest workers at a time when the government is claiming a large Forest Renewal B.C. surplus?

Hon. D. Zirnhelt: It sounds to me like the opposition wants FRBC to spend more and more. What we have said . . . .

Interjections.

Hon. D. Zirnhelt: Hon. Speaker, the light has come on, finally. We've been telling the opposition that we have been

[ Page 3062 ]

asking FRBC to ramp up their expenditures, and I can tell you that in every activity area in every region, there will be more spent next year.

[2:15]

T. Nebbeling: Another case is clearly the Lillooet watershed committee, which has proposed to spend $1.8 million to restore their watershed. In this case, Forest Renewal B.C. is only offering a third of the proposed funding. Now, instead of hiring 45 displaced workers as was planned, they will only hire 12 displaced forest workers. Can the Minister of Forests explain why FRBC is cutting back a program designed to hire displaced forest workers and create family-supporting jobs?

Hon. D. Zirnhelt: What we're witnessing here is wish-list budgeting. They are taking wish lists that people would spend if they had unlimited money and . . . .

Interjections.

Hon. D. Zirnhelt: Hon. Speaker, I would like to answer the question.

They are taking wish lists, and they're working at cutbacks to wish lists. There is going to be more spent in every program, including watershed restoration, in every region in the province.

G. Abbott: When this government created Forest Renewal B.C., watershed restoration was supposed to be one of the showpiece projects. But now, while the NDP is still talking about a surplus in Forest Renewal B.C., FRBC has reduced two-thirds of funding for an approved watershed program in the Bulkley Valley.

Can the Minister of Forests explain how cutting spending on watershed restoration will create jobs or enhance fish-bearing streams and rivers in British Columbia?

Hon. D. Zirnhelt: We have heard from members of the opposition about cutbacks to particular projects. It is true that as we expand the program, as people understand that there is . . . .

Interjections.

Hon. D. Zirnhelt: Hon. Speaker, there will be no cuts to any activity area. Every water . . . .

Interjections.

Hon. D. Zirnhelt: Perhaps the opposition should learn the difference between projects and programs. Some projects are going to take a longer time to reach fulfilment -- no question about it. But it's because there are many other watersheds in which there have been projects approved.

G. Abbott: Forest Renewal B.C. is informing licensees in the Bulkley Valley that they may not be able to fund projects approved last year. Not only will watershed restoration and inventory projects be cut, but jobs will be lost, as well.

Given that the minister has stated that FRBC can expect "a sideways shift in funding," will he confirm that these cutbacks are a direct result of off-loading ministry programs onto Forest Renewal B.C.?

Hon. D. Zirnhelt: No, I cannot confirm that.

K. Krueger: Mr. Speaker, this NDP government doesn't know if it's going to rip off Forest Renewal B.C. funds through the front door or if it'll take the funds out the back door by dumping programs onto FRBC. Now we have proof of how confused the NDP are.

An April 25 letter from Forest Renewal B.C. says that one month into the fiscal year, they still don't have a business plan approved by the board of directors or accepted by the Minister of Forests. Could the Minister of Forests explain why Forest Renewal B.C. is operating without a business plan?

Hon. D. Zirnhelt: Forest Renewal B.C. is operating with investment plans in each region. They're multi-year investment plans, and in the next week or so there will be an announcement as to what the investment plans for FRBC are.

K. Krueger: It's obvious that the Minister of Agriculture, Fisheries and Food does understand the advantage of preparing a business plan prior to each fiscal year. In fact, his proposed Fisheries Renewal Act states: "Before each fiscal year the board must prepare for that fiscal year a business plan that is satisfactory to the minister . . . . "

Can the Minister of Forests explain how he expects to find jobs for 5,500 unemployed forest workers, when Forest Renewal B.C. doesn't even have a business plan yet?

Hon. D. Zirnhelt: Forest Renewal B.C. does provide about 5,000 person-years of employment -- and since its beginning, upwards of 8,000 person-years of employment.

As I said in the answer to the previous question, the investment plans are multi-year investment plans. They are targets so that people can come to agreements and so there can be a move toward providing long-term sustainable jobs for displaced forest workers and others in the forest communities.

VIEWS EXPRESSED BY GOVERNMENT'S

CONSTITUTIONAL ADVISER

G. Plant: On another subject, last week I asked the Minister Responsible for Intergovernmental Relations questions about the $100,000 research project of his chief constitutional adviser, the member for Powell River-Sunshine Coast. Since then the adviser has continued to make public statements on national unity issues.

However, it's interesting to note that the project agreement signed between the minister and the member very clearly states: "Public comment with regard to the project before, during or after the project is completed will be mutually agreed to in advance between the minister and the chief adviser." The member for Powell River-Sunshine Coast was quoted in the Prince George Citizen on Saturday, saying: "Without Quebec there is no Canada, the Canadian constitution is invalid." My question is: given the terms of the project agreement, were these public comments cleared with the minister before they were made?

Hon. A. Petter: They just don't give up over there, do they, hon. Speaker? I think the agreement that the member referred to refers to statements concerning the project, not the member's opinions concerning the constitution, which, of course, as a private member he is free to make. As I said last week, we're looking forward to the advice he provides, through the project, to government and other members of this House.

[ Page 3063 ]

G. Plant: Well, from his repeated public statements, it's clear that the member for Powell River-Sunshine Coast has strong, firmly held views on the constitution, views he's not afraid to express even though they may brand him as a separatist in some quarters.

My question is for the Minister Responsible for Intergovernmental Relations. Why do British Columbia taxpayers need to spend $100,000 obtaining reports from the member, when he has clearly already made it known that he has made up his mind on the constitution, and he's perfectly willing to give us his opinions for free?

Hon. A. Petter: The member for Powell River-Sunshine Coast is undertaking a broadly based process in which he is undertaking research papers from others, which were reviewed by many British Columbians. Based upon that broad range of input, he'll be providing information to government.

I really find it perplexing that members over there are so afraid of one member of this House putting aside partisan concerns for a moment, putting concern regarding national unity and the future of this country ahead of those concerns, and trying to serve in that capacity on behalf of British Columbians. Is that so threatening to the members over there? Or are they so mired in their partisan mind-set that they can't accept it?

GROUNDWATER PROTECTION LEGISLATION

M. de Jong: In its last annual report, the Fraser basin management board, under the able chairmanship of the member for Vancouver-Fraserview, gave this government a D for the fact that British Columbia is the only provincial jurisdiction in Canada that doesn't have groundwater protection legislation.

On July 23 last year the then Minister of Environment responded to that. This is what he said. He said he was going to make sure that when we reconvened the House in 1997, we would have a piece of legislation to consider and debate.

This week is Safe Drinking Water Week, the government's own proclamation. My question is to the Minister of Environment. For those British Columbians who don't have ready access to safe drinking water, can the minister confirm her intention to fulfil her government's promise? Will she advise the House: are we going to see that legislation now, in the spring, or maybe in the fall in the new session of the House?

Interjections.

The Speaker: Order, members. You'll note, I hope, that the red light has gone on. You'll also note that the question, the

preamble, was rather long. Therefore I am assuming the answer may respond in kind, quite legitimately.

Hon. C. McGregor: It's my pleasure to answer the member's question. In fact, water quality is a very top priority of this government. Part of the legislative agenda we're dealing with in this session is the fish protection act, which will have measures that deal with water quality and, in particular, water as it relates to guarantees for fish.

However, I would also like to advise the member that we will be releasing a discussion paper this spring on other water quality issues, including discussions around groundwater legislation.

The Speaker: The bell terminates question period.

Ministerial Statement

YOUTH WEEK

Hon. G. Clark: I rise to make a brief ministerial statement regarding Youth Week. I'm pleased to rise in the House today to recognize Youth Week. Youth Week is a time when we can reflect on the many contributions youth make to British Columbia. I think we all recognize that the greatest contribution by far will be the future of our province. But today we should also reflect on what contributions we can make to youth to give them the tools to make the most of their future.

During Youth Week we should all reflect back to when we were starting university or our first job. Times have changed since we were youth. The job market has changed; there's no question about it. No one expects to work at the same job for 40 years anymore.

Students today face incredible challenges in getting an education. Across the country, students face higher and higher tuition fees. I know, coming from East Vancouver and from a modest-income family, that I would not be able to go to university today given what young people now face.

That's why we brought in the Guarantee for Youth. In B.C. we froze tuition fees for two years in a row. This year and last we created close to 10,000 new spaces in colleges, universities and technical institutes, so qualified students aren't turned away. We combined this with seven job- and skills-training programs to help prepare young people for the changing economy -- this year, creating about 12,000 jobs for young people.

Hon. Speaker, I also hear a lot of optimism from young people. Youth tell me: "Just give us the tools, and we will build our own futures. Invest in training and education, and let us get some work experience." I'm committed to listening to the voices of young people from across this province.

Today I've released the report from my second Premier's Youth Forum. I encourage all members to join with me in celebrating youth and in working to ensure that they have the opportunities they deserve.

[2:30]

B. Penner: It's a privilege for me, as the opposition Youth spokesperson and the youngest member of the official opposition, to address the Legislature during Youth Week.

Youth are often given a bad rap, Mr. Speaker. They're stereotyped. They're picked on and blamed for many of today's problems. I believe that, in many ways, today's youth are no different than the youth of a decade ago, 20 years ago or perhaps even 200 years ago. What is clearly different is the environment in which they live.

In British Columbia we're unique in that we're just about the only province where our youth population is increasing.

[ Page 3064 ]

The rest of Canada is seeing a significant decrease in their youth population. Since 1989 the youth population of British Columbia has increased by 12.6 percent. There are now almost 500,000 young people in our province. Compared to the rest of Canada, this presents British Columbia with a challenge and an opportunity.

Whereas other provinces are seeing the greying of their populations, putting an obvious strain on their health programs and on their ability to fund pension plans in the future, we in British Columbia do not have this problem to the same extent. A young population, provided they are able to find meaningful employment, will be paying the taxes necessary to support the social programs we have all come to rely upon. However, without sufficient employment opportunities, this potential advantage for British Columbia will be lost.

Indeed, all is not well in British Columbia. Youth unemployment is double the rate of those over the age of 25. Youth have an unbelievably high rate of unemployment. Looking back a few years, in 1990 the unemployment rate for students was 9.6 percent. Last year this rate had skyrocketed to over 22 percent. The youth participation rate in the B.C. workforce has traditionally been higher than elsewhere in Canada, but since 1989 the youth participation rate has fallen by 12.7 percent -- more than in any other province. This demonstrates a worrisome trend.

B.C.'s young people are giving up on our economy's ability to create new jobs. During the last election the NDP did in fact promise to create 11,500 jobs, but after the election last summer, there were 8,000 fewer jobs available to students.

Youth need more than empty promises. They need a more focused education. We need to focus on practical job experience, expand our co-op programs and complete that with skills training and private sector partnerships and apprenticeship programs. But above all else, our youth need a government that encourages the private sector to create long-term, meaningful employment. They need jobs that will help them pay their student loans, their rent and their tuition. They need jobs to unleash their potential. Mr. Speaker, youth need more than more empty promises.

Petitions

R. Thorpe: I rise to present a petition signed by 412 citizens of the Naramata Citizens Association, who are seeking understanding and action from this Legislative Assembly.

Orders of the Day

Hon. J. MacPhail: I call Committee of Supply in Committee A. For the benefit of the members, we'll be debating the estimates of the Ministry of Labour. In this House, I call Committee of the Whole to debate Bill 2.

BUDGET MEASURES

IMPLEMENTATION ACT, 1997

(continued)

The House in committee on Bill 2; G. Brewin in the chair.

section 14 as amended (continued).

D. Symons: Just as an introduction to the viewers, maybe I should explain that the statements we had earlier on youth and the ribbons that some of us are wearing in the House today are in celebration of youth, for Youth Week in British Columbia.

I'd like to ask some questions and maybe offer some cautions on

section 14, which deals with consultation with local governments. Indeed, we see that that was one of the big issues in dealing with the grant cuts that took place this year. A letter regarding that was sent to members of the Legislative Assembly from the city of Richmond, which is my community. In writing that letter, the mayor said: "The first area to which we object is the non-consultative approach of the provincial government used to bring about the changes in the funds that are distributed to local government." That was a real concern, so at least the government seems, in

section 14, to be addressing that particular concern. The other concern they had was: "Our second objection is, of course, the ramification of the $3.7 million in provincial cuts to the city of Richmond."

If you put those two things together, where there are cuts occurring and obviously the need for consultation -- and enough prior consultation, I believe . . . . I'm not too sure if it says anything about when that consultation takes place. That, I hope, will come in regulation -- something that will give, let's say, some advance warning to communities so they don't simply find out a short while before what the effects of any further cuts may be.

This is my real concern, because this year the city of Richmond suffered a 66 percent cut in provincial grants, and that 66 percent cut is a considerable change in the funding to Richmond. I believe it was somewhere in the neighbourhood of $3.7 million, which is not small change to a community.

If we take a look at smaller communities such as Valemount or McBride, even very small cuts can have a devastating effect on them. As a matter of fact, in the Valley Sentinel on October 2, 1996, there was an

article that said: "A government plan to review all municipal grants in British Columbia could mean financial hardships for Valemount and McBride. The two villages get at least half of their municipal finances through such grants, and the possibility of money being trimmed from them has councillors and officials worried."

Therefore beforehand knowledge of what is to take place is of great concern to all the communities around British Columbia. In the first round of municipal cuts Richmond was hit rather heavily -- as I said earlier, a 66 percent decrease in funding --

whereas for this particular year Valemount and McBride both had an increase in funding of a small amount. So to them, the devastating effects they were expecting did not occur.

The problem is that when you go back and look at

section 13, which we just passed -- at least, the government side passed that

section -- it allows the minister to make changes when they want. There does not have to be, as there was before that

section replaced a previous

section in the act, a limited amount of change -- 2 percent one way or the other, year by year. But here the minister can make no cuts, he can make very large cuts, he can reduce all the grants altogether or he can increase the cuts. It's all up to the government of the day, whichever day they decide what they're going to do, and that is not good enough.

So I guess what I really have is a concern and to ask the minister . . . . The first question is if he might define exactly what he means by consultation. Does consultation simply mean what seemed to occur this last time, where basically the mayors were called in and told what was going to be

happen-

[ Page 3065 ]

ing to them? Or, indeed, does consultation mean there's going to be some give-and-take, some meeting with each other and listening to each other and then coming to a decision? Or is the decision going to be made before the mayors and the various councillors are told what the results are going to be?

Secondly, as I asked earlier, is there going to be some time line so that we don't find out the week before the cuts or the changes are about to take place what those changes may be?

Hon. M. Farnworth: I guess I'll start by saying, for the benefit of viewers at home who are watching this show and wondering if there is something wrong with their TV . . . . Is this a rerun or a repeat of last Thursday's episode? I can assure them that no, it is not a rerun, though they may think it is. It is in fact live, even though the plot seems to be exactly the same as it was on Thursday. So if my answer sounds similar to Thursday's episode, in fact it probably is, because it seems like the questions are the same as Thursday's.

Hon. member, on your question in terms of consultation, I have in fact met with the mayor of the city of Richmond and some of his councillors. We had a very frank and fruitful discussion on a whole variety of topics -- consultation, I think some people might call it.

Anyway, we have signed a protocol with the Union of British Columbia Municipalities, and this section,

section 14, commits us to consulting at least annually with the representatives of the UBCM. But I can tell you that we are in fact consulting more than annually, because the protocol that we signed commits us to developing a process of joint consultation to deal with issues and concerns, be they legislative or financial. In fact, we've had three meetings to date, and they've been very useful and very productive; in fact, we're having a special meeting just on financial issues later on this year.

What we both hope to get to is a situation where we're able to tell them what type of financial commitments we're probably going to be able to make in the coming year. Then we're going to be able to sit down and discuss the allocation of where the resources go. That's what the municipalities have been asking for, and that's what's taking place.

D. Symons: Just one brief, follow-up question. I wonder if the minister might commit, when it comes to financial changes in the grants, to a six-month lead time for the communities so that they'll have time to adjust their budgets accordingly.

Hon. M. Farnworth: What I've committed to is working with the municipalities to look at financial issues on their timetable. Basically, I've committed that when I know what the financial implications for the coming year are going to be, then I will be sitting down with them at the earliest possible opportunity. They're happy with that, and that's where it is right now. That is something that's being achieved through joint consultation -- not me dictating to them, not them dictating to me, but the two of us sitting down at that joint council process and coming to an agreement together.

D. Jarvis: I've been watching for several days, and I don't really think that the minister is being fair when he says it's a show. He himself should know that the citizens out there are people . . . . The track record of this government is such that what they say today doesn't necessarily happen tomorrow.

Madam Chair, I want to tell the minister that I found that

section 14 -- he says the only word in there is "consulting" -- really is very highly suspected by people out there, especially the municipalities around this province. It's a little bit hypocritical, as well. You go back to that protocol agreement . . . . And then you go back to Elizabeth Cull's, when she stood up and said that we want to provide long-term sustainability, and it didn't occur. That's why people are suspicious.

[2:45]

I love these three words: certainty, predictability and sustainability. I think that's one of the reasons why I got up; I just wanted to say that.

Madam Chair, there's been a 30 percent overall reduction of the grants -- that's been mentioned many times -- for municipal funding. But this announcement basically occurred about a week, I guess it was, before the municipal elections. That was the really surprising thing that really bothered me: the fact that throughout this province probably the only party that put up slates was the NDP. But they knew that their chances of getting some of those slates elected, if they had announced a cut to the municipalities in such a fashion as they did, wouldn't be acceptable, so they waited until afterwards.

There again, the show that's on now, which you keep talking about, is basically because the constituents out there and the members of the municipality -- the councillors, the mayor and all the rest of them -- are very suspicious of what this minister intends to do. He's got a debt-ridden government, Madam Chair, and he's passing the buck problems onto the lower taxpayers and the property owners again. They're getting doubly hit again.

Then I heard the minister say a little while ago that the people weren't hurt very much by this, that most of the municipalities were able to overcome this situation of having their grant cut by large amounts. In my own area, the district of North Vancouver, there's an almost 56 percent reduction. In the other area of my riding, which is the city of North Vancouver, they had 50 percent. I notice that the minister's own riding was cut by only 44.8 percent. I don't know how he is able to walk down the main street of his town and not have rocks thrown at him. It's a wonder, you know; it's unbelievable.

Anyway, I do intend to ask a question, and that's why I'm standing here. I'm coming to it. You see, the minister is waiting with bated breath, so I guess . . . .

When the minister says that most of the municipalities were not hurt about this, I find that very surprising. In my own riding -- as I said, the major population area of my riding is the district of North Vancouver -- they lost $1,620,992, a considerable amount -- about 60 percent. The city of North Vancouver lost $961,640, so that was quite a considerable amount. However, the taxes in my area have gone up just over 3 percent, and that's because . . . . It's not because of this government; it's because we have prudent people managing our accounts in the district of North Vancouver.

But at the same time, it wasn't as easy as one might think -- having your taxes go up by 3.6 percent in the district of North Vancouver. We lost on the basis of services that had to be decreased. All the expenditures for other things, even the contingency program . . . . That's probably the worst thing, because a prudent government, unlike the government we have here now, always has a contingency plan. Most businesses have contingency plans, where they put money aside in the event of a bad year.

An Hon. Member: A rainy-day fund.

[ Page 3066 ]

D. Jarvis: For the rainy-day fund.

Now, this government has never done that. Their prudent plan for contingency is just to add more debt; that's their contingency plan. But the North Shore has always had a contingency plan. We've always operated a smart business practice over on the North Shore, but this year we've had to dig into that contingency plan. Fortunately, we have done that, but we've had to cancel next year's contingency plan of putting money aside, because we have been shorted by you.

So you wonder why people are cynical and why you keep hearing this repeated time after time, day after day, about this government. In this

section of the bill the only subject in it is consultation, and there is no consultation. You say there's going to be consultation, but your track record shows that it doesn't happen. If it does happen this time, it'll be one of the few times this government has ever followed through with one of their real statements that they're going to do things to help people. Most times it's just adding more taxes on or more service fees. I think we're up to something like $55 billion of service fees that came out of this government in the last little while. These are not taxes, but service fees -- you know, dues and things going out.

Anyways, when the minister says he's intending to consult, I want to ask: would he be in favour of letting my mayor know, because my mayor wanted to know? Are they going to reduce it to zero? Could he give me a definite answer, a promise, that the district of North Vancouver or the city of North Vancouver . . . ?

An Hon. Member: Put it in writing.

D. Jarvis: No. I don't know if he knows how to put things in writing. Or he could be afraid to commit himself that way. I bet he would refuse to. But will he give us a guarantee that next year our operating funds coming from the province will not be zero?

Hon. M. Farnworth: I'm glad I didn't hold my breath waiting for the member to ask the question, because I'd have expired several minutes ago.

Anyway, I'd like to address the member's remarks -- fascinating as they are -- because I'm very familiar with the mayors and councils of the two communities that make up his constituency. In fact, I met with one of the mayors and councils. We had a really good discussion -- a frank and open discussion -- on the issues concerning him: things that he wants to see done and things that he's asked my ministry to work on. Those things are taking place. I guess you'd call that consultation.

I'm more than willing to meet with his mayor and council at any time that he requests a meeting, and in fact that's been taking place. So I don't think your mayors and councils need to worry about whether I will be willing to meet with them. I will be willing to sit down with them at any time. We're already doing that, and that's going to continue.

On his second point, regarding consultation around grants and next year's program, I want to give him the same answer that I've given every other mayor in this community and every other member on the opposite side across the way, and that is that the joint council process, which we signed on the dotted line -- the protocol -- is in place. We're meeting on a regular basis to discuss the issues of concern to the municipalities themselves. We've held three meetings so far. We've got another one coming up later on this summer, dealing strictly with budgetary matters. The UBCM members will be reporting, I imagine, directly to all the municipalities and letting them know the progress of reports.

So I think the hon. member opposite should have no fear, no concern whatsoever, about (

a) whether the municipalities are being consulted -- because they are, through the joint council process -- or (

b) whether or not I'm willing to meet with them. As I've told all the mayors I've spoken to, and I'll tell the members opposite, I will meet with any municipality anytime, anyplace, anywhere on any subject.

D. Jarvis: I wasn't going to ask another question, because I assumed that the minister was going to answer my original question. My original question was . . . . That's why we keep asking these questions, because they never answer the questions properly. The question was: can the city of North Vancouver and the district of North Vancouver be assured that the grant next year will not be zero -- dollars, that is?

Hon. M. Farnworth: I can't tell the hon. member at this particular time what the grant next year will be. However, what I have committed to is that as soon as I know what financial implications we're likely to be facing next year, as soon as I get an idea of what type of grant program I'm going to be working with, then I will be sitting down with the UBCM at that joint council process, and we'll be talking about the potential size of any grant program that's in place and how it's allocated.

I can assure the hon. member that after that meeting takes place, then every single municipality will know. We committed ourselves to a process of discussing these issues with the joint council. That's what's taking place; that's what's been taking place; and it's going to take place at a special meeting this summer. So you know, hon. member, everything the municipalities have been asking us to do is being done.

D. Jarvis: Well, the minister has really made me nervous. We know that there is such a bad financial position now; they have managed the finances of this province abysmally. We know that we are virtually in the dumpster. Our taxes are going mup; our fees are going up; there is no future for industry to come into this province -- no one's coming in, and our basic resource industries are dying on the vine. And he won't answer a simple question as to how we're going to treat the municipalities. So I guess we can only assume that we had better cross our fingers, because we can't really trust what this Minister of Municipal Affairs will do to the municipalities next year.

I. Chong: I did speak on this subject at length last week, but I actually have a question today for the minister. I know the minister is attempting to stress again today the level of consultation that he is having with local governments. Last week I did indicate that I was not comforted by any promise of consultation that this government provides, because those kinds of promises do lack integrity. However, if I were to believe that the minister has involved himself in consultation with the local government . . . . I have the following question regarding the city of Victoria. I'd like to ask the minister: when did he consult with the city of Victoria about their $2.6 million tax cut?

[ Page 3067 ]

Hon. M. Farnworth: The changes that were announced for this year's budget were done before I became minister, so I didn't actually have a chance to personally inform the municipalities. That was the previous minister's responsibility.

I. Chong: I suppose that's a good enough answer. However, I would like the minister to be aware that this particular tax cut for the city of Victoria was not similar to other municipalities. In fact, of the $2.6 million tax cut that occurred, $1.1 million of it is directly related to the grant in lieu of property taxes dealing with the legislative precinct and Government House on Rockland. Hon. Chair, $1.2 million was provided last year to the city of Victoria to cover those costs, this grant-in-lieu. It's now been reduced from $1.2 million to $100,000. That's a $1.1 million decrease, which is not common to other municipalities.

I would like to ask the minister whether or not this kind of a unilateral decision can be discussed with the city of Victoria -- if not this year, then whether in fact it would be an issue that could be revisited next year, so that the severe cut they are suffering is not dealt with in the same manner in future years.

Hon. M. Farnworth: First, I want to say that in terms of this particular grant cut, that was taken into account in the overall calculation of how the city of Victoria stacked up in terms of a cumulative impact of cuts, and it fell within the 3 percent guideline that we wanted to ensure that no municipality was impacted by.

[3:00]

Second, in terms of discussing this issue or any other issue of concern to the city of Victoria, I've already met with the mayor and a number of his councillors from the city of Victoria. I think we've established a good working relationship. He's raised a number of issues with me, including this particular issue. I've given him our position; he's given me his position. We don't agree on it, but that's fine. What he wants to know, and what I've said . . . . He wants to be able to pick up the phone and call me anytime that he's concerned about a particular issue.

If he's concerned about this issue in the future, I'm more than willing to talk to him about the issue that you've just raised -- or any other issue that he cares to raise. In fact, that is currently taking place. I expect we won't agree on every issue, but there's a number of issues where there will be substantive agreement. There are a number of projects, a number of priorities, that the city of Victoria has that involve my ministry. We're working on them, and we're resolving those problems. There is consultation currently taking place.

L. Reid: Hon. Chair, I beg leave to make an introduction.

Leave granted.

L. Reid: We've been joined in the gallery this afternoon by 86 grade 11 students from Cambie Secondary School in my riding. I would ask this House to please make them welcome.

I. Chong: I thank the minister for the answer. I just want to be certain as to the response that, in fact, the particular cut made to the city of Victoria for grants-in-lieu this year would not be a standard occurrence, that next year we would be able to go back to the original base of $1.2 million and start from there -- in order to determine what possible cutbacks there would be for the following year -- and that we would not be starting from the $100,000 amount established for this year and having that whittled down further.

Hon. M. Farnworth: In fact, the grant has been eliminated, and I don't anticipate it being reinstated right now. The mayor of Victoria understands that. I've sat down and discussed the issue with him. He obviously has a different opinion on the matter than I do; that's fair. What he's been concerned about is that he be able to talk to me on a regular basis about issues concerning him, projects that he's got going, things that he wants to be done. All that is taking place. The mayor of Victoria and I have got a good working relationship. I don't see any problems with that continuing. If he needs to pick up the phone and talk to me, he can.

I. Chong: I'm somewhat distressed with the kind of answer the minister is providing. The minister is essentially saying that having once established a level of grant -- which, I guess, doesn't fairly evaluate the cost of servicing the precinct and Government House on Rockland Avenue . . . . What was established in the past has now been decreased substantially from $1.2 million to $100,000. That is where the minister will be looking in the future to raise it, as opposed to this being dealt with as a one-time cut.

I do appreciate that the minister is talking with the city of Victoria. I understand there are projects on the go, and my concern is the reluctance of the city of Victoria council to discuss this particular issue in a more forthright way with the minister because of those other projects, for fear that they may be in jeopardy.

So I'm trying to speak on behalf of the constituents of Victoria, on behalf of the council, who may feel threatened by potential projects -- that, in fact, their grants-in-lieu are not going to be dealt with on a consistent basis, in the sense that the $100,000 is now the base. The fact that they have an opportunity and that the minister will look and will consult with them to restore it to a fair level . . . . Because surely he must understand that $100,000 is not sufficient to service the legislative precinct or to service Government House.

P. Reitsma: I really wasn't going to say all that much. But over the weekend I've got better things to do; in fact, I was in a bridge tournament in beautiful Qualicum Beach. In bridge there's a lot of . . . . Like truth in budgeting, you must tell your partner what you have in your hand; otherwise you give out misinformation, and you go down. You simply cannot do that.

My question is coming up. When we go seven spades, surely we know that either I or my partner has the ace of spades, otherwise you can be doubled, be in trouble. This, of course, has been the no-trump advice and commitment that this government has had. It's no wonder I didn't see anybody in the Parksville-Qualicum area trying to explain that that's what they're trying to do with the cutting of the grants in the municipality. I wasn't going to say anything.

But during that tournament last weekend I couldn't help but think, in a spare moment, about the very curious and astonishing statement the minister made last week that all those grants, etc., don't really affect the municipalities. That's the conduit to a couple of nice questions, let me assure you. I notice the minister looking puzzled; so would I be if I didn't have the ace of spades and, of course, seven spades. But he might wish to go over Hansard of last week in his spare time.

[ Page 3068 ]

With your permission, Madam Chair -- even without it, for that matter -- the conclusions of the Gary Williams and Associates report to the municipalities, to the UBCM, concluded that:

"The reduction in intergovernmental transfers started with the provincial government reducing funding to municipalities in 1982. Reductions in federal transfers to the province did not start until 1988. In terms of significance, over the 15 years since 1981, the reduction in transfer payments has been greater for municipalities than for the province, no matter which of the three measured methods is used. The notion that municipalities were somehow protected from federal transfer reductions is not supported by the evidence.

"There will be a significant reduction -- 30 percent -- in federal transfers to the province over the next two years -- 1996-97 and 1997-98. This will be matched by a similar reduction -- 30 percent -- in transfers from the province to the municipalities . . . . "

I do have sympathy, believe it or not. I've been in municipal politics with the provincial government's position of getting less money. However, the federal government, with a general dose of courtesy and consultation, consulted with the provincial government and gave them two years. This particular provincial government gave the municipalities, through the UBCM, just one month's notice. The first of the questions to the minister is: what was his comment on Gary Williams and Associates -- those conclusions?

Hon. M. Farnworth: I would like to thank the member for the question and the lesson on bridge-playing. Not being a bridge player, I'm surprised that one in fact gets a spare moment during a bridge game to think about other issues, particularly . . . .

F. Gingell: That's what his partner wanted to know, too.

Hon. M. Farnworth: Exactly. Imagine, I was going to ask him how he did in this bridge game, because if he's thinking about other things instead of thinking about bridge, his partner may have something to say about his playing.

Interjection.

Hon. M. Farnworth: Oh, that's why you came second. Well, that should be a lesson, hon. member.

But back to the topic at hand . . . .

K. Krueger: You should hear what his constituents say.

Hon. M. Farnworth: Yeah, he's going to come second in the next election, too. That's what his constituents are going to say.

Interjection.

Hon. M. Farnworth: You gave me the opening, hon. member.

Back to the Gary Williams and Associates report. I'm familiar with the report, and I'm familiar with the argument that he advances. I'd just say this to the hon. member: that's probably a better topic for estimates discussion, where we can have a good and thorough debate on that. We are on

section 14, which deals with the process of consultation. In the interests of our viewing audience, who have been following this debate and know that we are on

section 14 and dealing with the issue of consultation, the issue that he raised is probably better left for estimates debate.

P. Reitsma: Yes, indeed, I think the audience might like to know a little bit of the background. I'm always very happy to give the minister some opportunities to come up with half a volley -- so that I'm able to give back a full volley, of course. I know the minister will come in second in his election, which is really astonishing because he will be the only one running. But that's another story, I suppose.

Hon. M. Farnworth: Acclamation -- I like that.

P. Reitsma: The only one running coming in second doesn't happen too often.

On the consultation, could I ask the minister: have he and his officials been able to communicate and consult with the council of Qualicum Beach, the council of Parksville and the council of Nanaimo in terms of the reduction of grants?

Hon. M. Farnworth: I think I've spoken to the mayors of those communities, and I know we have correspondence with those particular communities. In fact, if I remember correctly, when I spoke to them I said I looked forward to getting up to their communities at the earliest possible convenience to meet with them and their councils -- in the town of Parksville, in the town of Qualicum, in the city of Nanaimo -- to sit down and discuss issues of concern to them, be they local or provincial. I think that was met with enthusiasm.

So one of the things I'm looking forward to, probably when the House rises some time later this year, is getting up to those very communities that the member represents to meet with his mayors and councils to discuss issues of local concern.

P. Reitsma: The question really relates to whether the minister -- of course, he wasn't the minister at that time -- knows if the previous minister and/or officials met with officials and/or the mayors of the municipalities before the grants were announced in such an abrasive fashion.

Hon. M. Farnworth: Not being the minister when the announcement was made on November 26, I can't comment on things precisely, but I can tell the hon. member that the municipalities that he represents would have been aware of the issue. It was raised at the UBCM in discussions around the signing of the protocol by the then minister -- who had concerns, and I've expressed them to this house before.

But I think what's important -- and what your communities want to know right now -- is: what happens in the future? They're aware of what's happened in the past, and they're concerned about the future. And in that vein, I can give them the same assurance that I've given every other member in this House and every other council throughout this province: we've got the joint council process. It's up and working, we're meeting on a regular basis and we've got a special meeting in the summer that's dealing strictly with financial issues.

It is my desire that as soon as I know what we're working with, we will let the joint council know. We'll be able to discuss what's coming down the pike and how we allocate the resources that are available to us -- done through joint consultation. That's what your municipalities have asked for. That's what they pushed for when they asked the province to sign that joint protocol, and that's what's taking place.

P. Reitsma: Leading into the protocol agreement, neither my municipalities nor the councils nor the mayors like what's going on. In fact, just a couple of minutes ago I consulted again with the mayor of Parksville, who was mayor last year.

[ Page 3069 ]

Let me assure you that he cannot remember any consultation by the ministry. I just consulted him about half a minute ago, and he knows there was no communication between the UBCM and the provincial government.

You know, we're in the springtime, and it's time to plant. And of course for planting you need a lot of fertilizer, whether it's natural or artificial. All kinds of numbers -- 10, 22 and 14 -- indicate the various levels of whatever you use in fertilizer, of course. But three numbers will go down in infamy in the city of Parksville, the town of Qualicum and the city of Nanaimo: 21, 43, 63. It's not football; it's not a passing play from the quarterback to any of his receivers. It is a 21 percent cut in Qualicum Beach, a 43 percent cut in Parksville and a 63 percent cut in Nanaimo. That means that ultimately the local taxpayer will pick it up.

[3:15]

In terms of the protocol agreement, I was there when the agreement was signed. I was also there, and to my astonishment . . . . In the 12 years I have been on council, I have never, ever seen delegates boo a Premier or the Municipal Affairs minister. I think that in itself is extremely telling. I also find, to my great dismay, that about six or seven government members have served -- no doubt in a good way, as we all do in our own way; we try very hard -- in their own municipalities.

I don't think I can recall having heard from any other government members who have had the privilege of serving in local government, except from the minister, of course, because he has to respond -- him being the minister. To me, it's another example of some people . . . . Few people will stand up for what they believe in, and in this case all the members are falling for the government line.

The next question that I have is in terms of the consultation. If consultation, the process . . . I appreciate that it has to be done. It was not done, but at least it's going to be done now, we hope. For that matter, it's too bad we can't legislate that in some way. But if consultation -- the communication -- goes awry and there's no agreement, is there any mediation process? Is there any facilitator, as we have with the setting up of the new program with the regional districts, where if they disagree there's a process for mediation or some other consultation?

What happens if the provincial government and the UBCM, with the municipalities, do not agree? Is there a referee? Is there an arbiter? Is there some kind of mediator?

Hon. M. Farnworth: A couple of points. First, he made the comment about no notification and what took place at the meeting -- that there was no notification or even any indication that grants were going to be cut. So I'd just like to draw his attention to the speech that the minister gave at approximately 2 p.m. It's about halfway through the speech, so I guess he was probably uttering the words somewhere probably around 2:10 or 2:12 in the afternoon.

The particular phrase that was used was: "There are no guarantees at this point about grant levels for next year or even if our system of local government grants will continue in its present form." There were a number of references throughout his remarks, but that's one in particular that I'd just like to draw to the member's attention because he raised some concern about one of his mayors saying that there was nothing said about that. So I want to get that point out of the way.

The second particular point he just raised was concerning the issue of disagreement. Well, the fact is that the joint council, or the protocol, recognizes that disagreements may occur. In fact, at the table at the first meeting it was the UBCM members who said: "We are not going to agree, necessarily, on every issue all of the time. There may well be, in fact, disagreement." And you know what? They said that's a good thing, because they don't think it would be healthy if we agreed on everything all the time.

What they are concerned about is that we meet on a regular basis to discuss issues of common concern, and that we discuss legislative issues and financial issues. And you know what? That's what they want, and that's what's taking place. They don't want it to be that we come in, with us sitting down on our side of the table and them sitting down on their side of the table, that we put an agenda out and that all of us look at it and go: "Yes, I agree"; "yes, we agree." That's not what the exercise is. The exercise is to find solutions. And if we can, that's what we want. But sometimes we may disagree on things. And you know what? Disagreement is healthy as well.

P. Reitsma: I appreciate what the minister is saying, but he's skirting around the issue a little bit, which is that it comes to the point: what happens if there's a fundamental disagreement between the government and the UBCM? Who has the final say? I think I know, because the government can do anything they want to anyway. But I would like the minister to put on record who's got the final say. Or is there an independent arbiter or referee, like there is in labour relations, that might issue a report or a binding recommendation?

Hon. M. Farnworth: The issue may well determine the response. As I just said, we're going to agree on lots of things; some things we're going to disagree on. But we remain open to negotiation.

For example, the grant level is something that is set by government. That is the right of the provincial government and the right of this Legislature. However, what the municipalities have been asking is that we look at the allocation, that we sit down and talk with them about how it's going to be allocated. And you know what? That's going to happen.

I don't want to prejudge the process that we've put in place jointly -- the joint process -- because it's working. I hope that we never get to a situation where there's a huge, fundamental disagreement and that the dire consequences the member seems to talk about take place.

The fact is, the process is working. To date, it's been working very well. Municipalities have been bringing issues forward, as we have. We've been sitting down and discussing them, having working groups deal with the issues with a view to coming up with solutions that are agreeable to everybody. I fully expect that to continue.

P. Reitsma: A question about the last question, just maybe an update . . . . I go back to an

article in the Nanaimo Bulletin of Thursday, March 13, in which the mayor of Nanaimo asked a number of questions and referred to the fact that a couple of weeks earlier the Premier had said the B.C. government would be willing to discuss revenue-sharing and traffic fines with the municipalities that fund police detachments. Has anything transpired in terms of that?

Hon. M. Farnworth: I can tell him a number of things. First off, I'll say we can get into a full, detailed investigation of that in estimates. But what I can tell him is that I have publicly stated at the Association of Vancouver Island Municipalities that this is an issue we have to deal with. It's time we put

[ Page 3070 ]

issues like this to bed. The Premier has said the same thing: it's time we look at these issues. The same with the Attorney General.

And you know what? At the annual meeting of the Association of Vancouver Island Municipalities in Powell River, I got up and said: "I can tell you that my commitment to that issue is so strong that it's going to be raised at the next joint council meeting." I was widely applauded for that. And you know what? It was on the agenda at the next meeting of the joint council. They're glad about it, and there's work taking place. We're looking at options, and we're looking at all kinds of things. But the issue is being addressed through the joint council process, where it should be. So the process is working.

M. de Jong: I thought, in reinjecting myself into this debate, that it might be worthwhile to begin by doing this. If you believe the hon. minister, everyone agrees with this, and everyone is happy, and it's working beautifully. But that's not the case.

Bill 2 is universally seen as a betrayal by local government, and no amount of sugarcoating by the minister is going to change that. No amount of sweetness and light from this minister is going to change the fact that his government is reducing, arbitrarily and unilaterally, the amount of money that is going back to the communities from which it was originally taken.

So I just want to start by returning to the roots of the argument, hon. Chair. There's nothing to celebrate here. I understand that the minister is endeavouring to answer the questions. But he will understand that I do not -- and taxpayers across the province do not -- share his apparent enthusiasm for this piece of legislation, for the reasons that we've heard about over the past five or six days.

Having said that, I spent the weekend disappointed in the fact that I had enjoyed so little success in instilling in the minister those same lingering doubts that I have about how

section 14 is going to operate -- indeed, how I think it's not going to operate -- in a way that is satisfactory to local government and local taxpayers. I thought to myself -- as I know he did -- through much of the weekend, how we could confront this bill and confront one another in a way that might focus, even more sharply than what took place last week, the debate on what I see as the fundamental issue here.

I thought that perhaps one of the difficulties we ran into last week . . . . As suspicious as I and the UBCM are of where the government is going with this legislation, if I could put myself for a moment in the minister's shoes, perhaps he, being on the receiving end of the questions through much of last week, harbours some suspicion about what my motives and the motives of members on this side of the House were in . . . .

Hon. M. Farnworth: I have no suspicions, none whatsoever.

M. de Jong: As difficult as that might be for many people to believe, hon. Chair, I was forced at about 7:30 on Sunday evening to acknowledge the fact that perhaps the minister harbours some of those suspicions. And I want to confront them. I think I've done a lot to allow the minister to leave this place on the weekend with a misunderstanding of what it is that concerns us. Many of the questions that emanated from this side of the House dealt with issues of concern to our local communities -- in my case the city of Abbotsford, the communities in the riding of the member for Shuswap, and so on and so forth.

I thought perhaps if we could bring the debate around and attempt to demonstrate how this legislation might be seen to be operating in ridings represented by members on the government side . . . . The other reason I was very critical of myself in examining how this debate went was that I thought it was unfair of opposition members to, in effect, hog the floor, as we did last week, and not provide government members -- many of whom, I'm sure, are very disappointed about how this legislation is going to affect their communities -- with an opportunity to address questions about how this legislation will operate.

So if I can attempt to particularize some of those queries, I thought I would start with the city of Merritt. All of us have many other duties, and I'm sure those other duties have taken the member for Yale-Lillooet and prevented him from involving himself in this debate. I know that he would want to address the minister on the issue of consultation, particularly in light of what happened and his understanding of what consultation involves.

[3:30]

It wasn't that long ago when there was a suggestion, in the spirit of consultation, that the Select Standing Committee on Forests, Energy, Mines and Petroleum Resources, in considering the impact of changes in the forestry industry and the fact that they were adversely affecting the town of Merritt, should go to Merritt and listen to what the people there had to say. Unfortunately, the member for Yale-Lillooet didn't think that was necessary. And his reasoning was quite interesting.

This is where I get to the point involving

section 14, and I hope the minister is able to provide us with some assurance. The member for Yale-Lillooet said that consultation in that instance was inappropriate because the majority of people writing the letters had Liberal backgrounds. Right off the bat, the member for Yale-Lillooet, at least, distinguishes issues on the basis of who is bringing them forward. The member for Yale-Lillooet believes -- apparently believes, based on what he said in his press release -- that consultation is worthwhile if it's a particular class of people or type of person who brings these concerns forward.

But if they are people who are tainted by a particular political affiliation that is not consistent with the member's own views, then it's not appropriate.

He went on to particularize that at least two-thirds of the so-called invitations the committee received were from individuals with proven Liberal connections, including Liberal Party members, failed Liberal candidates, failed Liberal nominees, campaign donors and other Liberal supporters. It sounds to me like the member for Yale-Lillooet has the same intelligence network working on this issue as the Finance minister has working on the member for Powell River-Sunshine Coast.

[J. Doyle in the chair.]

The point is not a flippant one. Apparently the member for Yale-Lillooet believes that the type of consultation the government should engage in depends on who those persons wishing to make the representations are, and that lies, I'm sure, at the heart of the suspicion the council in the city of Merritt has. I think it's incumbent upon the minister, in light of

[ Page 3071 ]

what his member for Yale-Lillooet had said on this issue, to provide them with more assurance than he has been able to offer to this point that that kind of biased listening, if you want to call it that, won't continue to take place.

Interjection.

Hon. M. Farnworth: My answer will be considerably shorter. I was going to say that in no way would I consider the hon. member to be hogging the floor or behaving like a piglet, a sow or any other porcine-equivalent in his approach to debate today. I just want to tell . . . .

Interjection.

Hon. M. Farnworth: Again, hon. member, you gave me the opening. As he said, it's getting very close and maybe "boar" is a term that one may be . . . .

Interjection.

I just want to inform him, hon. Chair, that in response to his concern, the very first council I went and met with after becoming minister -- after my own, of course, of Port Coquitlam -- was the city . . . .

Interjection.

Hon. M. Farnworth: I said I was feeling charitable, and I know the municipalities are not looking for charity.

The very first council I went and met with after becoming minister was the city of Kelowna. The city of Kelowna is a council not known to be a bastion of New Democratic Party support in a constituency not known to be a bastion of New Democratic Party support. In fact, I've been meeting with mayors and councils across the province, irrespective of political stripe, and I will continue to do so.

M. de Jong: There is an old saying about the proof being in the pudding. It is one thing for me, for the member for Shuswap or for other members opposite, to say that and to suggest that what we want to examine are this government's deeds and not their words. But that, oddly enough, is the same message one hears across the province. I don't want to leave the minister with the impression that I rely for evidence of this solely on those areas of the province that didn't support the New Democratic Party.

We can go to the government Whip's riding in Port Alberni and indicate what the people in Port Alberni are saying, as reported in the Alberni Valley Times . I think the editorial of March 4 hits it on the head, where it says: " . . . the socialists have programmed the province not to take what they say at face value. In fact, none of what they say has any value. It's what they do that is serious and to be taken as what they meant all along."

The proof is in the pudding. I'm sure that the member for Alberni -- the government Whip -- doesn't like it when his local media and people in his riding emphasize the fact that they can't believe and have no faith in what this government intends to do and what has taken place, but that is unfortunately the sad reality. We talked about Merritt; we talked about the member for Yale-Lillooet. I still harbour some hopes that he will inject himself into this debate, because it's that same . . . .

Interjection.

M. de Jong: I can assure the hon. Government House Leader that the member for Yale-Lillooet does not need me to help him fall asleep in the middle of the day, although I'm happy to provide that service if she feels it has been helpful.

Interjection.

M. de Jong: I'm sorry. I again caught a little interference across the way, hon. Chair.

The city of Merritt lost about $62,000 arbitrarily in policing grants -- we're talking about a month or two ago -- having signed an agreement with this provincial government and having been assured that that wouldn't change without -- and there's this magical word again -- consultation.

Yet the police chief and city council wake up one morning to discover that $62,000 is going to be ripped out of their policing budget. The police chief -- the RCMP officer -- says: "It's like cutting the police budget two times, because more policing is needed in '97." The point is that there was an agreement. There was an assurance that there wouldn't be any changes without consultation, and it happened arbitrarily and unilaterally. It happened because this government decided it was going to happen, not because there was anything in the way of meaningful consultation.

We went on at length about what might be done to improve the legislation, to perhaps allay some of the fears of those communities out there wondering when the knife will fall next. I'm obliged to try one last time, insofar as amending this legislation is concerned. I feel obligated for a number of reasons, many of which I set out in numbing detail with the first round of amendments that were tabled. But I also feel obligated to table an amendment because I am concerned that the grounds upon which my last amendment was ruled out of order should not be permitted to stand.

Perhaps what I will do is to move the amendment I have, which reads as follows:

[That the existing

section 6 become 6(1), and that

section 6(2) be added to read:

(2) For the purposes of subsection (1), representatives of the Union of British Columbia Municipalities shall be defined as only those officials designated by the Union of British Columbia Municipalities, and shall include any persons from the city of Merritt so designated by the Union of British Columbia Municipalities.]

That, hon. Chair, is the amendment I am proposing to this section.

On the amendment.

M. de Jong: Let me say the following things. It is designed as and reads as a definition section. It is an amendment that defines a term referred to in the previous subsection. In that respect, in my view, it can in no way be taken to impose a charge on the provincial government, on the Crown in right of the province of British Columbia.

We engaged in this debate at some length on a somewhat related point last week, and the point I want to make is this. If the minister stands up and says, "One plus one is three," that

[ Page 3072 ]

doesn't make it so. One plus one is still two. It doesn't matter what the minister or what the Government House Leader has to say . . . .

An Hon. Member: Or the Minister of Finance, either.

M. de Jong: Although the Minister of Finance is likely the one officer of the cabinet more inclined to employ new mathematical techniques to answer that question in the way I suggested.

But we have to accept these amendments as they are proposed by hon. members. I just want to emphasize that the logic and reasoning we heard from the minister last week wasn't applicable then, in my view, and it certainly isn't applicable to this amendment. The logic employed by the minister was that an amendment that involved imposing a charge on the provincial government was out of order. Well, we have rules that confirm that.

In defining, though, how this amendment could possibly be seen to impose a charge on the provincial government, I would suggest that it is not -- as the minister suggested last week -- open to him to say that there would be redrafting costs involved in an amendment, and therefore those are the costs that accrue to the provincial government.

It doesn't work for a number of reasons. The bottom line is this: if that were the test by which amendments were deemed to be acceptable or not, no amendment would be acceptable. Any amendment proposed by a member of this hon. House would involve some redrafting, some reprinting cost. So that is not an argument, in my respectful submission, that is available to the minister. Now, if he has an argument that he wishes to propose, I'm interested in hearing it.

But the amendment says that there will be one set of consultations. It will be with the corporate body, the Union of B.C. Municipalities, and representatives of the Union of B.C. Municipalities. The people representing the UBCM will be those persons so designated by the UBCM, and may include a representative from the city of Merritt if the UBCM sees fit to designate such a representative. There will be that set of consultations. I defy the minister to explain to this House how that amendment can result in a charge accruing to the Crown in right of the province of British Columbia.

I should say this, hon. Chair. In rendering your decision on this amendment . . . . It is trite for me to say, but the rights of all members of this House hinge upon the decision you will make. If the logic employed by the minister last week is sustained, then we've got a serious problem. So that is the amendment I offer for your consideration, which I seek to introduce and have ruled upon today.

[3:45]

Hon. A. Petter: In my view, the proposed amendment is out of order in that it entails the same objection that was made to previous amendments, although it does so in a rather creative back-door way. But there is an old constitutional principle, which I'm sure the member is aware of -- that is, you cannot do indirectly what you cannot do directly. What the member is creatively trying to do here is twist the

section in such a way as to take the obligation of government to consult with representatives of the UBCM by giving to the UBCM the capacity to designate any number of municipalities and others as constituting the UBCM. That could most certainly impose an additional obligation upon the Crown or expenditure of Crown resources in order to meet the requirement of consultation with a more expanded entity than the one that is normally considered to constitute the UBCM.

By simply trying to do what the member was unsuccessful in doing last week through a range of creative amendments, he has not solved the basic problem through this amendment. Whether it's done directly or indirectly, as this amendment would have it, by allowing the UBCM to expand and reconstitute itself through creative

definitions, including any number of municipalities, it does not get around the basic problem that this amendment does or could require an additional expenditure by the Crown and is therefore out of order.

M. de Jong: On the amendment, let me say this: I'm waiting for the evidence. The minister is offering the same sort of -- and I say this respectfully -- hollow response we got from the Minister of Municipal Affairs. How does this amendment result in a charge being accruing to the Crown? The Finance minister chooses to misread the amendment. I get back to my original point: the minister saying one plus one is three doesn't make it so.

The amendment is clear. It says there shall be one set of consultations. It will be with representatives of the UBCM, and it gives to the UBCM the right to designate who those representatives shall be. It's one set of consultations; one corporate body. Now, presumably the Finance minister, by virtue of what he is saying today, would apparently remove from the UBCM the right to designate who will conduct those deliberations on their behalf. He harbours some suspicion that somehow the UBCM intends to sandbag this whole operation. That's what he is saying, but he becomes very creative.

He is bound, I would submit, by the words that appear in the proposed amendment. He can't import some fanciful

interpretation of what these words are. They are presumed to say what they say. If the Finance minister or the Municipal Affairs minister has some evidence . . . . And hon. Chair, I'd ask you to be cognizant of my submissions on this point; I know you're listening out there somewhere. We haven't heard evidence of how this results in additional costs to the Crown. The Finance minister or the Municipal Affairs minister saying, "It does; I think it might; I think it could," doesn't change the fact that we are still contemplating one set of consultations with one corporate body as the act presently reads.

Hon. A. Petter: Bluster doesn't get you past the basic argument here. Either this amendment means something or it doesn't. If it doesn't mean anything, then I'm not sure why it's being proposed. But I will give the member the benefit of the doubt and assume it means something. So it must add something to the words that are currently in the proposed section, which provides that there is to be consultation with representatives of the UBCM. What it's trying to do is empower the UBCM to expand in some way the entities that are to be consulted by taking the ordinary meaning of the UBCM as it will be interpreted by someone reading this

section and allowing, through this creative subsection, an extension of that.

Now, if you want an example of what the member is doing that is slightly more exaggerated, it would be like taking an obligation that the government should consult an entity -- say the UBCM -- and saying in a subsection that for the purpose of this section, the UBCM shall be defined as anyone the UBCM designates. The UBCM could then go and designate the entire population of Canada or perhaps the entire population of the United States.

Either this means something or it doesn't. If the UBCM is to engage in consultation in a meaningful way, based on the representatives it wants to, then the current wording allows that to happen. The courts and anyone else will give a reasonable

interpretation to the words "representatives of the UBCM."

[ Page 3073 ]

It is the member who's trying to torture that meaning of the UBCM into some new, expanded meaning that will, indeed, if it means anything at all . . . . If the member wants to stand up and say it means nothing, let him engage in that embarrassing exercise. But if it means anything at all, it is saying to this Legislature that the Legislature should empower the UBCM to expand the obligations for consultation beyond those that currently exist. Either it means something or it doesn't.

I and the Chair should give the member the benefit of the doubt. It means something; and if it means something, it means that there's an additional obligation being placed upon the Crown.

M. de Jong: The embarrassment here is the Finance minister's desire to twist the rules of this House in a way that strips away any rights that opposition members have to influence the direction legislation takes as it passes through this chamber. That's the embarrassment.

We can decide by voting whether the amendment is redundant, whether it's ill-considered, whether it's stupid, whether it's meaningless, whether it's right or whether it's wrong. But the question you've got to decide, hon. Chair, is whether it's in order or not.

When the Finance minister retreats to arguments questioning its redundancy, quite frankly, it is irrelevant. What he does is demonstrate by virtue of the submissions he made in this House just two minutes ago that he doesn't trust the UBCM. He doesn't trust the Union of British Columbia Municipalities to conduct themselves in an honourable way. He is the one who is saying that an amendment of this sort will provide them with carte blanche to expand in a way that no one is thinking of and that the amendment doesn't provide for.

If the Finance minister, if the Municipal Affairs minister, if the members of the government side disagree with the amendment, if they disagree with specifying that the city of Merritt should be designated as part of the UBCM negotiating team to participate in that capacity, then vote against it.

But what are they afraid of? What are they afraid of in allowing an amendment that a member of the official opposition has tabled in this House to go forward to a vote? We haven't heard an answer to that, hon. Chair. We haven't heard why they're so afraid to let opposition members and the people of British Columbia speak on Bill 2.

Hon. A. Petter: What we have heard, hon. Chair, is an objection, based upon the rules, that this member not be allowed to do through the back door what he and his colleagues were not allowed to do last week through the front door: namely, make an out-of-order motion that would inappropriately impose an expenditure on the Crown by expanding the range of consultations anticipated, and I would ask you to so rule.

The Chair: Hon. members, the Chair has listened to views from members on both sides of the floor. After listening to those views, I am persuaded that an open-ended power to designate any number of persons from the city of Merritt to consult with the government is a direct negative and would impose an obligation on the Crown.

Interjections.

The Chair: Hon. members, the Chair has listened to the views of the members, and I am persuaded that an openended power to designate any number of persons from the city of Merritt to consult with the government is a direct negative and would impose an obligation on the Crown. If there are no other members, I call the question on this section.

M. de Jong: Well, hon. Chair, the rules of this chamber require me to proceed, guided by the decision that the Chair has made. I say with the greatest respect that I find the ruling confusing and unhelpful in terms of . . . .

The Chair: I would ask the member to please take his seat.

I would remind the hon. member that the Chair has ruled, and you are not to question the rulings of the Chair.

M. de Jong: I have only confessed my confusion and disappointment. I don't think I've reflected on the ruling of the Chair in any other way.

I am aware of a letter that the Minister of Municipal Affairs wrote to the people of Campbell River, where he comments -- I'm quoting from the letter earlier in April: "It is a local responsibility to oversee development, to plan for existing and future needs and to identify secure financing for community infrastructure."

As accurate as I think those words are, I cannot help but make the observation that the ability of communities to engage in that exercise is being compromised by this legislation and compromised by an attitude that we have just seen revealed in all its horror from the government benches: their reluctance to entertain debate and amendment, even to allow debate around an amendment to take place.

I think it is lamentable that the Finance minister would cheer a decision which he -- as someone who has sat in this House for many years -- must know has far-reaching implications for the right of opposition members to engage in debate in a meaningful way and to submit amendments for the consideration of the 75 members -- 74 now -- that sit in this place.

[4:00]

So I don't think this is a day to celebrate; I don't think this is legislation that we should be celebrating. I know that the government's reluctance and their intention to stifle debate around this important question is something that we shouldn't be celebrating; I am not. I will say to the minister that when he issued that declaration charging local government with responsibility for overseeing development, for looking after the future needs, for identifying and securing financing for their community infrastructure, was he then contemplating a process that would leave those communities entirely at the whim of a provincial government sitting in Victoria to decide on a

schedule and, in a way that the Victoria government deems appropriate, on what those funding levels will be for the communities that are going to be affected?

Hon. M. Farnworth: I'm going to respond to some of the comments of my hon. colleague across the way. He seems to think that the government takes delight in making cuts to municipalities. Well, it doesn't. Governments have to respond

[ Page 3074 ]

to serious financial situations. This is not an attempt to stifle debate or dialogue. We've had a debate around an amendment that was accepted by the government.

This is an attempt to try and change the course of this bill, to not allow it to go through. I understand that, and that's the role of members opposite. But what it won't change is the commitment that this government took on back in September when it signed the protocol: to sit down and consult with municipalities on issues that are concerning them, through a process called a joint council, which consists of the ministers of the executive councils who municipalities deal with on a most regular basis and the table officers of the UBCM.

This approach came from the grass roots in the municipalities themselves. It was local government-driven. The provincial government accepted that and signed that joint protocol back in September. At that time, the province also made it clear to municipalities that there were changes coming in terms of the formula and in terms of grants -- that they were all being reviewed.

What the municipalities wanted and what they have been talking to me about on a regular basis was that we sit down with them and make this joint council process work. I repeat again that it is working. It didn't just come into being overnight; it has taken time to evolve. So far, we've met three times and discussed legislative issues, financial issues, issues of concern to municipalities and issues of concern to the provincial government, just as was envisaged in that joint council process when we signed that protocol. We're resolving issues and finding solutions to problems through a process of consultation that's taking place.

Hon. members opposite are concerned about consultation over fiscal matters, financial matters and grant implications. That's taking place. Time and time again, I hear the criticism: "Talk is cheap. We want to see action." Well, if no meetings had taken place, I would say that, yes, talk is cheap. But the fact of the matter is that those meetings are taking place.

The hon. member talked about the mayor of Port Alberni. She is the head of the Union of British Columbia Municipalities, and she is the person who chairs meetings with me on an alternate basis. I speak to her probably more than I speak to the mayor of my own community, yet he insists on quoting some editorial as proof that it is not working. Well, the only use I have for editorials is when you run out of toilet paper, which, thank God, isn't too often.

[G. Brewin in the chair.]

The members of the UBCM are being served by their organization, because the executive of that organization is making the joint council process work. They've called for consultation, and that's taking place. There's a meeting coming up later this year that deals strictly with financial issues. We accepted a recommendation -- in fact, an amendment from the member for Shuswap. That was accepted in good faith. And do you know what? That meeting is going to take place in the summer.

We'll discuss what the financial implications are like for the coming year, we'll discuss what the resources are going to look like, and we'll discuss how we're going to allocate them. When we're at the UBCM convention in September, we'll be able to make a full progress report. We'll be able to say what issues we've been dealing with, what the decisions around them have been and what progress is being made. After a full year, the entire membership of the UBCM will be able to see how the joint council process is progressing and how it's working, and they will get an idea of how it's going to evolve in the future.

They don't want to talk just about financial issues. They want to talk about legislative issues and about changes to the Municipal Act. Those are taking place. The changes to legislation are taking place on the basis of proposals put forward by the UBCM -- not arbitrarily imposed by the province but agreed to jointly.

Changes for next year's legislative program will come about through the same process -- a consultative process. For the hon. members to say that talk is cheap is to ignore the reality of what has been taking place over the last number of months, which is a concerted effort by the province in good faith and a concerted effort by the UBCM in good faith to make the protocol that was signed last September work for the betterment of the province, the municipalities and, ultimately, the people they serve. I don't know what more I can say.

M. Coell: What we're talking about here is meaningful consultation with municipalities on the grants they receive from government. I would like to propose an amendment that I think the minister has already agreed to.

Section 6 is being repealed, and the following is substituted: "Consultation with local governments." In the minister's bill, it is annually. I am suggesting the amendment that

section 6 read:

[At least quarterly, the minister must consult with representatives of the Union of British Columbia Municipalities regarding the administration of grants under this Act.]

I suggest this because what we're interested in here is that consultation take place on a regular basis and that the minister be committed to it. On May 1, with regard to a question from the member for Shuswap, the minister said: "I think we're meeting about quarterly to discuss legislative issues and financial issues. They have asked, as I have stated previously, for a specific meeting to deal with financial matters." So the minister is already meeting quarterly, and I would like to see an amendment to this motion to guarantee those meetings quarterly rather than annually.

The Chair: Do you have copies for the Chair? Thank you, hon. member.

On the amendment.

Hon. A. Petter: As I understand the amendment, it is to quadruple the number of times that the government, through the minister, will be required to consult, as currently required through legislation. Our obligation here is to make sure that the rules of the House are observed and that additional obligations through legislation are not inappropriately placed upon government through amendment. The fact that he has said, as I understand it, that he's going to be meeting quarterly, as a matter of policy, is beside the point. The question is whether this is going to be placed as an obligation through legislation.

Frankly, the members are being mischievous in trying to find creative ways not to advance public policy but to try to get around a ruling that, far from trying to evade and avoid, they should be supporting. That is a ruling of the Chair that has previously been made in respect to these matters: amendments that seek to impose further obligations of this kind upon the Crown are out of order.

[ Page 3075 ]

The Chair: Hon. members, I have reviewed the amendment, and in my view, it does impose an obligation on the administration of the government. On that basis, I therefore rule it out of order.

G. Abbott: The opposition does not propose to belabour this particular

section any further, and we are content to rest our case at this point. Regrettably, the constructive suggestions we were proposing to make in our resolutions have not been accepted by the government or by the Chair. As a consequence, we are prepared to move on. I do want to note, though, as we pass this rather consequential section, that I think people in British Columbia appreciate what we on this side of the House have tried to do here.

I was up at the North Central Municipal Association meeting on the weekend in Valemount, and there was certainly an excellent appreciation among the municipal representatives who were assembled there. They very much appreciated what the opposition has tried to do in this House with respect to this bill. We have tried in a number of ways -- one of which was accepted by the government, mercifully -- to try to strengthen the requirement for consultation in this bill.

It was inspired, I can assure the Chair, by our concerns about the way in which consultation was by and large not conducted by this government over the past six months or, indeed, two years. We felt it was appropriate to strengthen the consultation provisions, and I'm glad we followed through on that.

We have also tried to preserve what fragments of predictability, stability and certainty we could from the Local Government Grants Act. Regrettably, the whole purpose of this bill is to get rid of those elements of predictability, stability and certainty. The fundamental principle of this bill is to eliminate those key provisions in the Local Government Grants Act. The whole purpose of Bill 2 is to leave the Minister of Municipal Affairs and indeed this whole government completely unfettered in determining the amount of municipal transfers from year to year.

[4:15]

There is nothing -- and we have hit on this point numerous times in our discussions of sections 12, 13 and 14 -- that would require the Minister of Municipal Affairs to ensure that municipal transfers will be anything more than zero in 1998, 1999, 2000 or whenever.

My view, and certainly the view unanimously shared on this side of the House, is that the cuts that were announced by this government on November 26 are unfair and unwarranted, and homeowners, renters and small businesses around this province know that. They know as well that this bill is an ill-conceived and wrong-headed legalization of the cuts that took place on November 26, and as I said earlier in this debate, I think the stench that surrounds this particular bill will stick with government for a long, long time. I think that what they have done in this whole sorry process is something this government will regret for many years to come.

Section 14 as amended approved.

Sections 15 to 17 inclusive approved.

section 18.

F. Gingell: I intend to deal with sections 18 through 22 at this one time. I was wondering if perhaps the minister could advise the committee how many vehicles in the province at this time are fuelled by propane, which was free of any fuel tax and will now be subject to a fuel tax?

Hon. A. Petter: First let me just clarify what I think the member probably knows but others may not fully know, and that is that this legislation does not introduce a tax on propane. The introduction of a tax on propane is a function of other legislation that was passed some years ago. Through that legislation, an exemption on propane automatically terminated, and that resulted in the imposition of a tax. What this legislation does is ensure, through consequential amendments, that imposition of that tax through other legislation is not imposed unfairly. So, for example,

section 18 ensures that propane will not be taxed more highly than other coloured fuels. I just wanted to clarify that point.

I want to say in advance that while I'm prepared to provide information that is relevant to the discussion of these sections, I hope we do not stray into areas that I think are beyond the scope of this legislation: namely, the question of other legislation whose effect may be contentious in the members' minds, but is legislation that was passed some years ago and is not contained within the four corners of this act.

As I understand it, in response to the member's question, about 35,000 vehicles in this province are currently fuelled by propane.

F. Gingell: I think the minister's response is most interesting, seeing that he has just finished giving us a lecture that you can't do through the back door what you're not allowed to do through the front.

This minister knows perfectly well that this original provision was brought in -- in 1972?

An Hon. Member: In 1982.

F. Gingell: In 1982. It was done in '82, renewed in '87 and renewed in '92. Now we are at 1997, and it isn't being renewed. For the minister to suggest that this House should allow that to happen without a discussion of it, suggesting that we should limit debate on this bill to not include the imposition of a social service tax on propane -- because that is what it is . . . . However you wish to colour it, that is the case. Other members of the official opposition, I believe, will deal with the issue of the propane tax.

So we have 35,000 vehicles converted to propane under the belief that this tax exemption would be carried on every five years, as it has in the past. There was no notice given earlier on to people considering making the fairly substantial investment -- an investment of up to $2,500 these days, I believe -- to convert their vehicles to propane use, which, as we all know, dramatically reduces the emissions from the internal combustion engine that it is used to fuel. We have 35,000 vehicles that are suddenly dropped off, as it were, the edge of the cliff. The minister will mention, I am sure, that this

section does keep the renewal going for vehicles that are fuelled by a fuel that's known in the industry as M-85 -- that is, methanol. I was wondering if the minister could advise the committee approximately how many cars are fuelled by M-85.

Hon. A. Petter: As I recall, I think the member gave that information himself a few days ago, so it must be another one of those rhetorical questions he likes to ask in the House. The information I have is: something in the range of 25 to 50.

[ Page 3076 ]

F. Gingell: The minister will now be well primed for the third question, which is, of course, dealing with the fuel E-85, which this government has so generously carried on with. The exemption for E-85 continues; provision was especially put in this act. Perhaps the minister could advise the committee how many vehicles in the province are fuelled by E-85.

Hon. A. Petter: I appreciate that the member seems to be making the point that one of the critical reasons for extending exemptions for certain fuels, as this legislation does, is to encourage more vehicles to utilize those fuels. Once one has an infrastructure in place and conversion has taken place, then the rationale for the exemption gets called into question. The information I have from staff is that the figure of 25 to 50 -- I apologize to the member -- was intended to include both of those fuels, not just the one.

F. Gingell: To include both of them, I think the number is more like 25. I believe that the number is around 25 vehicles for M-85, and I know what the answer is for E-85: it is one vehicle in the province. Now, this provision has been in place for either five years or ten years, and we have one vehicle. We have 24 vehicles that are fuelled by methanol.

All of these provisions were originally put in because this government and the government before were committed to cleaning up the environment, concerned about the issue of greenhouse gases and concerned that we do not create in British Columbia -- and in the Fraser Valley, particularly, because it has the geography that lends itself to the problem -- another Los Angeles. This government is cancelling the exemption for 35,000 vehicles and continuing it for 25 vehicles.

So we can basically state, without fear of contradiction, that the commitment of this government to the environment and to meeting Canada's commitments to reduce greenhouse gases is finished -- no longer on, ended. I would be most interested in the response of the minister to the accusation that I make.

Hon. A. Petter: The member always throws these tempting challenges at me. I do want to just come back to the basic point, and then I'll probably rise to the challenge. But I just want to preserve the context of this debate.

Without this legislation, not only would the propane be subject to social service tax, but so would the other two fuels that the member has specified. Without this legislation, and this particular

section 18, the rate of propane in reference to coloured fuels would result in those who are eligible for coloured fuels paying a higher rate for propane than they would otherwise pay. So this particular legislation is entirely on the benefit side in terms of providing exemption or reduction in terms of tax that is imposed through other legislation.

Now, having said that, let me just stray a little bit to answer the member's question. As I understand it, the exemption on propane was introduced in order to recognize that propane might have environmental advantages as a fuel and also, principally, to provide an opportunity for investments to be made to provide the necessary distribution network and infrastructure to provide access to propane. Certainly, as the member's own inquiries have shown, that infrastructure is now manifestly there in the form of a service network that services 35,000 vehicles.

The other legislation, which has now come into effect, does impose a social service tax on propane. But the tax rate, by virtue of that legislation -- which we're not debating here -- is still one-quarter, on an energy-equivalent basis, of the tax on other motor fuels -- gasoline, in particular, and other non-exempt motor fuels.

As a result of that legislation, B.C. ends up with 2.2 cents a litre on propane, which places it at the very low end -- in fact, the lowest end -- of provinces. Alberta, our neighbouring jurisdiction, taxes propane at the same rate as gasoline. In fact, the only other province I know of that taxes propane at as low a rate is Quebec, at 2.2 cents a litre. So if we were debating that other legislation -- which we aren't, but we can certainly debate the issue in estimates -- my answer would be that this government's policy well reflects an environmental preference for propane, which has a three-quarters advantage over other fuels in terms of taxation.

I would also point out that the experience in other provinces is that the imposition of a tax, certainly at this level, tends to be a cost that does not find its way to the consumers so much as it gets absorbed within the distribution network. To put it another way, the exemptions, when provided, tend to add to the profits of the distributors, not benefit the consumers.

F. Gingell: I didn't know the minister had such an in-depth knowledge of that that he could stand up and make a definitive statement that the lack of tax adds to the profit of distributors rather than to the benefit of consumers. I think the minister, with due respect, is talking nonsense. I don't think the minister understands. His life in the universities has not . . . .

Interjection.

F. Gingell: No, that is true. That's absolutely true. This is nonsense. There is a 35,000-vehicle market for propane. There is a one-million-vehicle market for gasoline. Of course the cost structures are going to be different. Of course the need to absorb the costs of distribution are going to be different. There's just no question about that.

I was wondering, just as a matter of information, if the minister can advise the committee, from his briefing notes, of an approximate breakdown of the 35,000 vehicles between Vancouver Island, the lower mainland, the interior, the north and the southeast of the province. If you have those numbers, that would be helpful.

[4:30]

Hon. A. Petter: No, I don't have that breakdown. I'd be happy to try to secure a regional breakdown and provide it to the member in due course.

But just to add a little to what I said, the indications that I gave were not provided by myself but were provided through examination by staff and others on the experiences of other provinces. If you look at other provinces, most of whom charge either full fuel tax on propane or a much higher rate than is being charged, or will be charged, in this province, the price differential between propane and other fuels is about the same as has been the case in this province with an exemption. This tends to suggest that the benefit of the exemption is not being passed through to the consumer.

In any event, the fundamental point remains the same: there is a huge tax advantage that remains in this province for propane. It doesn't relate to this legislation; it relates to other legislation that the member would like to debate and is really not before us to debate.

F. Gingell: No, please don't spend any time getting the breakdown of the number of vehicles. I can probably get a

[ Page 3077 ]

good feel for that through my own means. I wouldn't want to require the government to have any further commitments which this minister would rule out of order.

I guess the minister would not accept an amendment proposal by me that I think would have been fairer. I think that it would have been better if the government had given some form of public notice and had said to the motoring public: "We are only going to renew the propane exemption for two more years -- if we're still in office at the end of two more years." That, at least, would have allowed people to recognize that the sun was going to set on this exemption.

I would like to suggest to the minister that it's really not appropriate to say, "Well, when it was put in in 1982, it was only for four or five years," because it got renewed then. It got renewed in '87; it got renewed in 1992. I don't remember -- and I'd be pleased to be corrected if such is the case -- that any notification has been given by the provincial government to the motoring public in British Columbia that the propane tax exemption was going to be allowed to expire at the end of 1997.

It's something like the discussions on municipal grants that we've just spent a few moments on. It's that these things suddenly come out of the blue. With municipal grants, they were told in 1995 that there would be certainty. In 1997, they're all of a sudden gone without notice. It seems to me that this is somewhat similar. It would be nice to have given us the two years . . . . Maybe there is . . . .

Hon. A. Petter: I'm happy to respond to this point, albeit we're again sort of straying from this legislation. But to clarify this matter, maybe we should allow ourselves a little bit of leeway -- if the Chair will allow us that.

In fact, there has been knowledge -- certainly within the industry initially, but also amongst the motoring public for some time -- that because of the expiry of this other legislative provision, the government was looking at and reviewing the exemptions generally. In fact, a news release was put out on December 13, one that announced the exemption would continue for the two alternative fuels. That news release said: "Government is also reviewing the exemption of auto propane. Submissions from interested parties will be accepted until January 15. A decision is expected in early February."

Furthermore, even when we announced our decision on propane, we deferred the imposition on propane under other legislation for two months to allow people to have notice. I guess the evidence that there's been a good discussion . . . . I can quote for the member from an

article of March 13 in the Times Colonist . It's from Mike Jeggo, president of the Capital Region Taxi Owners Association and general manager of BlueBird Cabs. Here's what the Times Colonist wrote:

" . . . last year, when the government started talking about removing the tax exemption on propane, it was" -- according to Jeggo -- "talking 8 to 12 cents a litre. With propane up at 49 cents a litre during the winter, a tax that high would have made it uneconomical to convert vehicles to burn the alternative fuels, said Jeggo. Now that propane is back to about 29 cents a litre, a 2.2-cent tax doesn't look too horrendous, he said. 'I think that's a pretty fair deal, actually,' said Jeggo."

I quote this, of course, not to support the substantive decision in that other legislation but simply to point out that this has been a matter of some discussion, both by distributors and by users of propane -- in this case, the taxi users of propane -- for some time. Their input was invited; it was heard. As a result, the decision was made not to change the legislation, which meant that the default tax that came in was not the motor fuel tax but rather a social services tax -- a much lower tax than that imposed on other motor fuels.

As this quote suggests, there was some satisfaction for members of the industry that they were heard through that consultation process, and the result is one that is not going to be grossly disadvantageous to them.

F. Gingell: I believe the date of that news release was December 1996. The subsequent stuff was in February '97. I'm not talking about four months' notice. I'm talking about all of the people who have been buying and converting vehicles in the last couple of years. That two years . . . . If the government intended to allow this exemption to die, it would only have been fair to have given notice two years ago, so that there wouldn't be people who had done vehicle conversions in 1995 and 1996.

Yes, I appreciate that by making it taxable under the Social Service Tax Act, rather than under the Fuel Oil Tax Act, the taxes are substantially lower. That's good, and I'm pleased that the minister saw fit to do that. But it really does seem to me that we're arguing about cutting off one finger or five fingers. I think it would have been appropriate, really, to have given good notice, so that people could have planned properly. I know that if I had done a conversion of my vehicle to propane in mid-1996, I would feel that I had been treated most unfairly.

It is important for government to have the citizens feel that they are being treated fairly, so that we discourage them from rushing across the border and filling their cars up south of the border, and all those things. My issue isn't the amount that they're taxed; my issue is the lack of notice and any amount of tax.

Hon. A. Petter: Let me take one final run at this. It may not satisfy the member -- whose job it is not to be satisfied, as an opposition member must not be -- but it will add a little information. In 1992, when this legislation was reintroduced -- not the legislation we're debating, but this other legislation that we're not debating but are talking elliptically about -- it was the first time that a sunset provision was introduced, as I understand it.

That surely put everyone on notice, users and distributors alike, that this was an exemption that was going to come to an end -- or at least was likely to come to an end. So in respect of earlier notice, I think the legislation itself sent that signal.

Beyond that, the decision to give some months' notice here was, I think, designed to provide fair warning. As the member knows, very often tax decisions are sprung on people without any notice. Sometimes it's desirable to do that out of fairness so that there is no advantage-taking. But here it was felt that some notice that government was contemplating this provision was in order, and it was provided.

At the end of the day, the tax imposed is still the lowest in Canada. It still is one quarter the tax, on an energy-equivalent basis, that is imposed on other motor fuels. In terms of those who invested, the payback period for conversions, as a result of this adjustment, is extended by something like three or four months on the current 30 months. It's not a huge additional burden. It doesn't change the basic structure that propane is an advantaged fuel from a tax point of view, that conversions are paid back over time through the tax advantage.

Notice was given in the initial legislation some four or five years ago. It was renewed in a more specific way prior to the end of the last calendar year. The decision that was made is one that continues to treat propane in a highly preferable way and recognizes that conversions are ones that should pay for themselves through the payback that is achieved at the pump. All of that remains in place.

[ Page 3078 ]

Now, the member must not be satisfied with that, or he would lose his critic's responsibility. But I think it measures up pretty well to the test of fairness by any other reasonable standard.

F. Gingell: Perhaps I should think about this from a Finance critic's viewpoint and ask the minister exactly how much additional tax this government anticipates to raise by this 2.2-cent-a-litre tax that now will be exigent but wasn't previously.

Hon. A. Petter: It would raise about $8 million on an annual basis. Because the first two months of the year was a period in which the tax had been delayed under other legislation, the amount will be something in the range of $7 million.

F. Gingell: So the amount of additional taxes that this government promised that they were not going to raise from any source -- no new taxes . . . . I know what the minister is going to say: this is not a new tax; it's just a tax that was there but no one was collecting it. It was an old tax that we'd never had before that's suddenly come back to life and is going to raise about $8 million.

Moving along, there have been some discussions during the past five years about whether or not British Columbia would follow the example of Saskatchewan, Manitoba and the federal government in bringing in any exemptions that deal with ethanol-blend fuels, with ethanol either at 10 percent or 5 percent. I used not to have to bring these subjects up because we had a member from Chilliwack -- who's no longer a member of this House -- who made it a personal crusade. As the minister knows, there are very substantial environmental advantages to ethanol-blended fuels; Mother Nature told me that.

I'm wondering whether this provincial government is planning on following the example of the federal government, the prairie provinces and Ontario.

Hon. A. Petter: I know the member has had this debate in the past, and I'm afraid my answer is going to rather track that of previous ministers. No, B.C. has not considered providing tax relief for gasohol blends containing 10 percent alcohol, either methanol or ethanol. That's for a number of reasons.

First of all, part of the reason for the tax exemption is to cover the cost of conversion and the cost of an extraordinary infrastructure required for a distribution network associated with environmentally preferable fuels. Neither of those two features apply in the case of the blends that the member is referring to. They can be carried through existing infrastructure at the pump, and they can also be burned in cars without conversion. So they are not considered for those two reasons.

In addition, there is some debate around just how much additional environmental benefit they in fact offer, because I take it there are offsetting features to these fuels in terms of their atmospheric effects in the way they are pumped, etc., that call into question whether the environmental benefits, even if one were looking beyond the factors I've just indicated, are sufficiently great to justify recognition through tax relief.

F. Gingell: Hon. Chair, my last statement on this. I'd be happy to finish my portion of this with what the minister often says to me: I would be most happy to arrange a briefing of the minister on this issue.

K. Krueger: I hear a great deal from constituents about this propane taxation issue. I tell you very honestly that this has really crystallized in the minds of my constituents the offence they take at government continually saying one thing and doing another. People feel betrayed by this.

[4:45]

I grew up in a home with a very gentle father, a giant of a man who was really gentle. I remember one time he was absolutely outraged. It was because a man he knew had decided to teach his little boy a lesson. He got him to climb up in a tree, held out his arms and told him to jump down to him. The little boy was afraid. The father said: "No, trust me, trust me." The little guy finally made the jump, and the father dropped his arms and let him fall. He lay on the ground crying. My father was infuriated and said: "Why would you do such a thing?" And the man said: "To teach him a lesson. He's got to learn not to trust people in this life."

It was a brutal thing to do, of course, and it's an extreme example. But people feel betrayed when they are encouraged to trust someone, to trust a government, and then find out that they can't. Frankly, people feel that they were led down the garden path by the provincial government -- not just the government of this day, but governments of the past. They certainly didn't expect, when they went to the expense of converting their vehicles to propane, that this sort of thing would ever happen -- that the rug would be pulled out from under them and they would end up feeling foolish that they had spent the money on changing the vehicle.

Frankly, it is a little more troublesome to fuel up a propane-powered vehicle than a gasoline-powered vehicle. It takes more time at the pumps. Often the customer has to wait a little longer because the other fuels have a higher profit margin, presumably, and the attendants often deal with them first. But at any rate, people decided to do those things, and they believed -- and still do, and so do I -- that it was an environmentally wise and environmentally conscious decision to make, and they really feel betrayed by this.

I have heard the minister's arguments that it's really other legislation he feels we're talking about, but I agree with the member for Delta South that that is more or less a reversal of the minister's backdoor discussions that took place earlier. It would be easy to continue to extend the tax exemption on auto fuel propane, just as the exemption is being extended for the other fuels. People will feel, and already feel, that this is a major example to them of a government double-dealing and reneging, going back on its word, double-crossing them, saying one thing and doing another, and being unreliable and untrustworthy.

So I have to speak again on this issue on behalf of the people I represent. Even by the Finance minister's own numbers, if it's 35,000 cars, if it's $8 million that the government expects to enjoy as additional revenue, that works out to $229 a year per vehicle. I've seen calculations of $500 per year per vehicle. But whatever it is, there are a lot of people who voted NDP in the last election believing that this government would be faithful in its commitment not to nail them with further taxes.

We've been speaking in this same debate on this same bill about the taxes people are going to have to pay municipally because of the changes to unconditional grants and transfers to local governments. Taxpayers feel they're getting it in the ear in that area, and the taxpayers who are using propane certainly feel that in this area as well. They're asking me what they did it for. Why did they go to that major expense? They feel that they did it for nothing, that they've been sabotaged, that they've been tricked.

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And people in the industry are very concerned, because the competitiveness of their product, of course, is being altered. They're concerned about their business, about whether customers will switch away. Apparently conversions are tapering off dramatically, because people realize this is probably the thin edge of the wedge. In any event, the attractiveness of the option is gone. So this is viewed by my constituents and many constituents -- I've seen letters from all over the province -- as a betrayal by government.

When we get to the next section,

section 19, I'll be proposing an amendment which I hope the Finance minister will seriously consider. We'll get to that, obviously, very shortly. But I do feel it's incumbent upon this government to consider these arguments, to consider the protests of the many people who have written about this issue -- and the letters have been forwarded to