1992 Legislative Session: 1st Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MARCH 31, 1992

Afternoon Sitting

Volume 1, Number 16

[ Page 333 ]

The House met at 6:14 p.m.

Orders of the Day

Hon. C. Gabelmann: Committee on Bill 16.

SUPPLY ACT (No. 1), 1992

(continued)

The House in committee on Bill 16; E. Barnes in the chair.

On the schedule.

A. Warnke: I have perhaps one more question and then a comment. In particular, looking at where we left off, warrant No. 9 of February 28, 1992, I'd like the Attorney General to elaborate briefly on the Royal Canadian Mounted Police and the amount of funds that we allocate to that. In particular, I notice the retroactive salary increases for the RCMP. I would like the minister to elaborate on that and also on the general costs of RCMP services throughout this province.

To speed it up -- a little matter, too -- I'm wondering about whether RCMP involvement in some sort of special forces, such as what we've seen in the Penticton riot and so forth, appeared in some of the special warrants as well.

[6:15]

Hon. C. Gabelmann: First of all, on the Penticton consequences, there was a small amount of overtime rolled into the special warrant as a result of the Peach Festival activities of last year and the requirement for some overtime -- although, to be fair, I think the RCMP themselves would say they ate most of the costs internally in terms of having to squeeze elsewhere.

In respect of the $1 million increase, this was on a $100.7 million total and was for a pay increase that the RCMP got during the course of the year, which wasn't predicted in the budget last year.

G. Wilson: Just to go back to the line of questioning that I was on prior to the adjournment, I take it that with respect to Coordinated Law Enforcement, the response was that there is no regional bias in the expenditure of that money. Is that correct?

Hon. C. Gabelmann: That's correct, Mr. Chairman. Clearly, the major activity that CLEU deals with is in the major urban centres -- there's no question about that -- but they will chase crime wherever it happens in British Columbia. There's no bias in the southeast corner as a result of some particular policy. As I said earlier, they will go to Sechelt if they have to.

G. Wilson: If I could turn to legal services, what portion of the moneys committed in 1991-92 actually went to fund the Legal Services Society and what amount went into legal fees and costs? Can that portion of your budget be outlined and broken down in some detail? If you have covered this, I will defer to the record and go back; I was unable to be here in the first part of this debate.

Hon. C. Gabelmann: The way this works is that money is allocated to Legal Services Society, and they in turn pay fees that are billed to them. Overwhelmingly, the money is accounted for in respect of the tariff.

G. Wilson: Then any accounting for the internal disbursement of that money would come from the Legal Services Society themselves and would not be reflected in any ministerial budget. Is that correct?

Hon. C. Gabelmann: Yes, that's absolutely right.

G. Wilson: Having determined that, I notice that the probation, family and community services provision in the budget.... I realize we can't be debating this year's estimates, but I notice that a substantial amount of money is going to be committed in this new budget with the provisions to victims' assistance and violence against women. In terms of last year's allocation, has it been determined how much of that money actually went into victims' assistance programs, or indeed is that the appropriate place for that to be seen?

With respect to family services, was any money committed last year for programs that addressed violence among men and were essentially directed to counselling and family service programs for men prone to violence?

Hon. C. Gabelmann: There are a number of victims' assistance programs, as the member is aware; the total money expended was in the order of $5 million. The corrections branch has a program dealing with men who are violent.

G. Wilson: Do we have a dollar figure on that corrections program?

Hon. C. Gabelmann: We don't have that here. I would undertake to provide that information to the Leader of the Opposition later.

G. Wilson: I thank the minister. I would be anxious to get it, because I think it would help the official opposition in its review of how we might deal with this pressing and very difficult societal problem, to see how we might put some greater allocation of funds into those kinds of programs.

My final set of questions to the minister has to do with liquor control and licensing. I recognize that this year the government is boasting a $50 million tax gain in this year's budget through the sale of alcohol. Out of the money that is put in place in terms of liquor control, I wonder how much money was committed from the Ministry of the Attorney General last year for education with respect to substance abuse and education programs that were directed towards maintenance of the appropriate use of alcohol, and to what extent those control programs actually addressed juvenile offenders, with respect to under-age drinkers.

[ Page 334 ]

Hon. C. Gabelmann: It's a curious mix of ministry responsibilities. Alcohol and drugs used to be in Labour and Consumer Services; they're now in Health. Alcohol also used to be in Labour and Consumer Services; it's now in the Attorney General's. Through the Attorney General, we don't actually spend any of the money that we take in through liquor sales to deal with programs. The Ministry of Health does that in a coordinated fashion.

G. Wilson: That explains a lot of things, and I thank the minister for that explanation.

My final question comes from one that I put to the Minister of Aboriginal Affairs, and it had to do with programs that were directly related to violent crime against aboriginal people and also programs that involved the question of substance abuse among aboriginal people. He suggested that that would be more appropriately put to the Attorney General's office. I put it to you now: what was in last year's expenditure with respect to dollars committed for aboriginal people, both on reserve and off reserve, with respect to the matters of policing and violence against aboriginal people, as well as alcohol and substance abuse?

Hon. C. Gabelmann: In 1991-92 about $900,000 was provided for 12 aboriginal justice projects. In addition, the corrections branch is spending about a total of $728,000 on a number of different native programs that had been identified through a native justice consultation process that we have in place. Those are just some numbers.

I think the important thing is that we see native justice issues as a priority, and we are intending to attempt to coordinate programs more than we have in the past and give them a higher emphasis than we have in the past as well. We have the South Island project underway now, which we think is leading us in some good directions. We're determined to try to do a lot more with native justice issues.

A. Warnke: Actually, I would prefer to conclude the questions; I see it is getting a little late. However, I want to make this comment. I want to thank the Attorney General for being forthright in his answers to my questions and to questions from my colleagues.

L. Fox: I will ask clarification from the minister on whether or not this is the appropriate ministry for this question. Recently the Stellaquo band in the Fraser Lake area negotiated a settlement through the Highways ministry and will be gaining some remuneration. Was that remuneration paid out of your ministry, or would that have been paid out of Highways?

Hon. C. Gabelmann: Transportation and Highways.

The Chair: That concludes the Attorney General, and by agreement we now will be moving to the Ministry of Economic Development, Small Business and Trade.

L. Stephens: Mr. Chairman, I would like to congratulate the Minister of Economic Development on his appointment. I would like to say that the minister and his staff have been very willing to assist me and my research people in our inquiries, and we thank them for that. I would also like to take this opportunity to welcome the appointment of the new Deputy Minister of Economic Development. I've not had the chance to meet him, but I look forward to doing that soon.

Economic Development is really a very important ministry, and its mandate has been to promote development in the regions and economic development generally. The ministry promotes trade in British Columbia as a destination for international investment.

[6:30]

The ministry has run a number of programs which have been quite important to the economic diversification of the province. I'm glad that we have the opportunity in committee today to examine some of the spending through special warrants in the ministry over the past year. There have been three reorganizations of this ministry in the last year, and as a critic for Economic Development I've had to bring myself up to speed on the current incarnation of the ministry, but have also had to trace the evolution or devolution of the ministry and the programs and divisions attached to it over the past year. So I'm glad we have this opportunity to go through some of these.

To turn to the question of special warrants, the reorganizations have made it somewhat difficult to track spending over time through these special warrants. The fiscal year started with this ministry being called Regional and Economic Development, and a special warrant of $14 million was authorized to maintain the programs of that ministry on April 1, 1991. Of course, this amount was then included in the first Supply Act passed on May 31, 1991.

After we had a change of Social Credit Premiers, the ministry was reorganized and picked up responsibility for tourism. It was renamed the Ministry of Development, Trade and Tourism, and under this name money was authorized through two special warrants allocated to the ministry: September 20, 199,1 of $25,982,000 and October 29, 1991, of $4,138,000, for a total of $30,120,000.

Under the present government, the ministry was reorganized once again and renamed Economic Development, Small Business and Trade. Under this reorganization the ministry lost its responsibility for tourism. The ministry also lost responsibility for the Trade Development Corporation, which was transferred to the Premier's office. Money authorized through three special warrants has been allocated to the ministry since November 5, 1991: November 13, 1991 -- $14,885,000; January 8, 1992 -- $24,276,000; and February 28 -- an extraordinary grant to the B.C. Pavilion Corporation for a total of $39,161,000.

Because of the reorganization and switches in program responsibility, it's somewhat difficult to track the spending authorized through special warrants and the two supply bills over the last fiscal year. If you add up the amounts authorized in the

schedule to the first supply bill, and the amounts authorized in the special warrants passed both by Social Credit and this NDP

[ Page 335 ]

government to maintain programs in the ministry, excluding the grant to the B.C. Pavilion Corporation, you get a total of $83,281,000. On top of that is the spending of $8,400,000 for the B.C. Pavilion Corporation, and if you add that to spending, the amount authorized which can be directly tracked is $91,681,000.

The first question I would like to ask the minister is: what was the total amount spent, including the special warrants and the budget, for the ministry in 1991-92?

Hon. D. Zirnhelt: I was waiting for my officials to arrive before I introduced them, and I'd like to do that at this point. On my left is the assistant deputy minister for the business development division, who's acting for the new deputy, Ian McKinnon. His name is Chris Nelson. He has been the acting deputy until the appointment of the new deputy. On my right are Colin Smith, ADM for the management services division, and Brian Dolsen, senior financial officer. We will be attempting to answer your questions.

We realize it's difficult tracking, with the reorganizations. I should say that we aren't entirely finished, because we have to tune the organization to meet the needs of the new government and the economy that's in transition. We're trying to do that, and it will take time, as you can appreciate.

Your first question, then, is what is or will be the total amount spent in this fiscal year, 1991-92. You appreciate that March is projected, although it will be close to this. The figure will be $93,804,764. The total that was budgeted, corrected for the different changes in the organization, is $95,389,000. If you subtract those two, you'll find that there's approximately $400,000.... I'm sorry, the first figure I gave you was next year's budget. We will come under budget by approximately $400,000, and that's the difference between the budgeted amount of $95,389,000.... We will spend $95 million.

L. Stephens: On page 49 of Budget 1992, "Expenditure by Ministry, Consolidated Revenue Fund, Economic Development, Small Business and Trade," the estimate you have for 1991-92 is $95.4 million, and the revised forecast 1991-92 is $191 million. Could you explain that for me, please?

Hon. D. Zirnhelt: Yes. The difference is made up by a Treasury Board submission for $8.4 million to fund the B.C. Pavilion Corporation. There's a statutory expenditure, basically a provision for bad debt, of $86.8 million, and there's recoveries of $1 million.

C. Serwa: I'll let the opposition critic continue with the questioning. I just didn't want to lose this opportunity.

On the $86.8 million debt write-off, I think that is something we will be exploring, and we would like an explanation of what you have written off and why you have written it off, and what time-period that debt write-off encompasses.

Hon. D. Zirnhelt: On the write-offs, these are questions that will be answered and debated when we discuss Finance, because these were ones booked by the independent financial review. We have taken the advice of the auditors and we can debate those. If you want to question the Minister of Finance on those, that will be appropriate, but I suggest that we should do it under his estimates.

L. Stephens: Other than the obvious loss of program responsibilities for tourism and the Trade Development Corporation, have there been any other major changes to the responsibilities of the ministry of which the members of this House should be aware?

Hon. D. Zirnhelt: Yes. The previous government, not us, suspended business finance programs, so when you adjust for the other organizations and programs, the only program not in there is business finance. But I'd like to add for clarification that while we are no longer running the business finance program, we were moving a lot of activity to the job-saving area, and we seconded a lot of people to work on projects with the Job Protection Commission, basically supplying information. So with the staff that ordinarily was evaluating business start-up loans and that sort of thing, those programs were directed towards some of the activities around job-saving.

L. Stephens: On the $8.4 million allocated to the B.C. Pavilion Corporation on February 28 to compensate the corporation for its capital expenditures and accumulated operating deficit, I'm wondering if the minister can inform the House what the capital expenditures were and why there was an accumulated operating deficit.

Hon. D. Zirnhelt: I'll give you the breakdown first. The breakdown was $1.5 million for capital funding, $2.4 million in accumulated operating deficit, and $4.5 million to pay for the Fraser Valley Trade and Exhibition Centre.

I'm going to specifically answer on the $1.5 million for capital funding. In B.C. Place Stadium there was an upgrade on corporate signage; there was the Hussey seat and Kayson seat repair, furniture, fixtures and equipment. That totalled $655,000. The Robson Square Conference Centre: there was a proportionate share to develop the food and beverage area as per the lease, plus furniture, fixtures and equipment, for a total of $360,000. The Vancouver Trade and Convention Centre: there was furniture, fixtures, equipment, leasehold improvements and others, for a total of $215,000.

The corporate office of the Pavilion Corporation: computer system upgrades were $150,000. At Bridge Studios there were building improvements and repair, furniture, fixtures and equipment, for a total of $120,000. Those items total $1.5 million. They were the capital expenditures necessary for them to carry on business in a suitable environment.

The Chair: Hon. member, I can't recognize you unless you're in your seat, but I can wait until you get there.

[ Page 336 ]

G. Wilson: Thank you, Mr. Chairman. I appreciate the indulgence.

I wonder if the minister can tell us with respect to the B.C. Pavilion Corporation.... If we're reading the special warrants for addition correctly, we're looking at an $8.4 million debt, and that's essentially a deficit expenditure. Could you tell us whether or not that expenditure occurred prior to or after November 5?

Hon. D. Zirnhelt: The expenditure occurred prior, although it was approved after. You realize that we're talking about a Crown corporation that is running. When they come with a shortfall, they come for an appropriation as necessary, and we saw fit to grant it.

G. Wilson: Essentially that $8.4 million was something that was committed after November 5 to accommodate overruns in the Crown corp that had happened prior to that. I think that's what the minister said. I see that he's acknowledging that.

My second question would be: could the minister tell us to what extent the expenditure of the approved budget in 1991-92 had in fact been met by November 5? What amounts had actually been expended, and of amounts incurred since that time, what are the reasons for those expenditures?

Hon. D. Zirnhelt: Was your question about the whole ministry budget or this particular...?

The Chair: Opposition House Leader.

G. Wilson: With due respect....

The Chair: Pardon me. We're even now.

The Leader of the Opposition.

G. Wilson: Touché, Mr. Chairman. We are indeed even.

We would obviously like to know the ministerial one. I think there are some more questions that the critic may want to address with regard to that, but I'm specifically talking about the B.C. Pavilion Corporation.

[6:45]

Hon. D. Zirnhelt: Let me go back over the makeup. The $4.5 million was to pay for the Fraser Valley Trade and Exhibition Centre. That was a capital expenditure that was on the books, and we basically decided to write that off. We covered the cost of that. The $2.4 million was an accumulated operating deficit, which we again allowed them to write off, and the $1.5 million was for capital funding. I'm saying that those expenditures all occurred prior to November 5, but they came for retroactive approval.

This illustrates the problem of Crown corporations operating out on their own. We are taking steps to ensure that they operate in a businesslike fashion. This was part of cleaning up the bad business practices of the past.

G. Wilson: Would the minister indulge me just for a moment here, because I'm having difficulty with this. It may be that I'm reading the wrong figures. What the minister has just indicated to me adds up to -- if I'm not mistaken -- $5.5 million, and what we're looking at here is $8.4 million. Am I incorrect, and, if so, could you...?

Hon. D. Zirnhelt: Yes. I'll give you the figures again. These add up to $8.4 million, and they're made up of: $4.5 million to pay for the Fraser Valley Trade and Exhibition Centre -- otherwise known as Tradex -- capital cost; $2.4 million in accumulated operating deficit -- a business debt from '91-92; $1.5 million for capital funding. Those are the ones I itemized in some detail, and they total $8.4 million.

G. Wilson: Of that total, then, essentially the amount that the ministry had decided to simply write off on the basis of the advice of Peat Marwick would be roughly $3.9 million.

Hon. D. Zirnhelt: Peat Marwick really didn't have anything to do with that. This was done on application from the corporation and on the advice of Treasury Board staff. The Treasury Board did that.

L. Stephens: Could the minister indicate what pressing reasons there were to pay down the accumulated operating deficit on February 28 with the use of a special warrant?

Hon. D. Zirnhelt: The basic reason for the accumulated deficit was that the previous administration did not adequately fund the province's money-losing facilities. Basically, it wasn't adequately funded, and you either continue to accumulate interest or you bite the bullet on it. We decided to do that.

F. Gingell: Mr. Minister, you can appreciate that we have problems following all the accounts and working out exactly where all the disbursements come. Under the control of your ministry are two particular funds -- one called the industrial incentive fund and one called the small business incentive program -- and they're both classified as special accounts. For the year 1991-92, there were proposed to be gross disbursements made under the industrial incentive fund amounting to $90 million. First of all, believe it to be true that this is called a financing transaction.

When you pay it out, instead of it being owed to you by the bank, it's owed to you by someone else and is therefore not included in your ministry estimates. Is that correct?

Hon. D. Zirnhelt: That's basically correct. You will also appreciate that I may not have the depth of accounting experience and may have to consult from time to time to get the right technical terms. I'm advised that that's basically correct.

F. Gingell: Can you advise me, Mr. Minister, of the amount of money that was actually paid out during 1991-92 against this account as loans and investments made under the industrial incentive fund that have not been included in special warrants?

[ Page 337 ]

Hon. D. Zirnhelt: We have it to February 29, 1992. We don't have it until the end of March. Do you want the running total? Under the fund, there's an accumulated approved spending of $146,211,974. That's for what we call ad hoc projects -- that's a one-of-a-kind type. Then there's Job Protection Commission with $1,130,000. The industrial development agreement total is $39,890,477. Under the business expansion program we have $11,882,889. Then there's a solid waste enterprise incentive program, which is basically no longer in operation, at $279,500.

The total for the entire industrial incentive fund is $199,394,843. The total that's been disbursed is $168,936,002. So there has been committed approved funding, but it hasn't all been disbursed, because some of them don't meet all their conditions of their loans.

F. Gingell: I really am confused now. There was an amount anticipated to be disbursed in the year, from April 1 to March 31, of $90 million. Are you telling me that the amount that has been disbursed in that period, April 1 to March 31, is $199 million? Or is the $199 million the total of all the loans that have been made from the beginning?

Hon. D. Zirnhelt: I may have misunderstood you, but I'll answer two questions then. I thought you were asking about the whole fund, which has been accumulated since 1985. We don't have the figure from April 1. We'd be happy to provide that figure to you, but we'd have to do some computation on that particular fund.

Let me just give you a general answer. When we took over, the previous government had, running up to the election, frozen these funds. So the disbursements have been under the Job Protection Commission. The only programs that weren't frozen were anything recommended under the Job Protection Act. So anything that's been approved has been approved under the act.

F. Gingell: Can you give me the same numbers for the small business incentive program, for which $17 million had been proposed in the year?

Hon. D. Zirnhelt: I'm just trying to get the timing on it. Basically, in this fiscal year that program has been suspended, so you won't find any under that. Again, the only ones that were approved were under the Job Protection Act.

F. Gingell: Can you tell us if any portion of the $86.8 million that's recommended as a bad-debt provision against what I presume are these accounts results from loans that were made in this fiscal year?

Hon. D. Zirnhelt: I'm going to give you a general answer to that, and I was suggesting.... I talked to the Minister of Finance before he left, and as you know, the administration and legalities surrounding some of these bad debts.... The decisions are taken with legal counsel and with financial counsel. Any of them that are booked in this way I would really defer to the Minister of Finance.

C. Serwa: I'm confident that the minister knows full well that in the Legislature what he's expressing as a concern is in fact not a concern. The minister has been asked questions, and I will continue on that particular tack. I believe he is Minister of Economic Development, and he must come forth with the answers. That is the purpose of this whole exercise. The Minister of Finance is not the minister of everything, to the best of my knowledge.

L. Stephens: I would like you to turn to page 73 of the estimates of March 31, 1992, for vote 17. It's the minister's office. Would the minister be able to tell me how much was spent in the minister's office after November 5, 1991?

Hon. D. Zirnhelt: I can give you the figure for November to February, because we don't have this month's figures. The amount is $97,236.

L. Stephens: I know that you did not have much control over all the reorganizations in the past year. Is there any estimate on how many extra costs were incurred in the minister's office as a result of the coming and going of minister's assistants, staff changes and letterhead and so on and so forth?

Hon. D. Zirnhelt: There certainly weren't any for our administration. Technically, as you know, we're not really accountable for what the previous administration did, but I would be trying to imagine things. I certainly didn't redecorate when I came in, and I'm not aware that any of the other ministers did. But as to whether or not there's an inefficiency created with reorganization and moving pieces, I doubt it. Ministers' offices are just busy all the time, and how many pieces you have isn't really relevant.

When Tourism was added it really increased the load, and there probably was a lot of pressure because of the size of that ministry. During our administration I don't think whatever we did to reorganize was inconsequential, but the movement of Tourism did not have an effect on the minister's office.

[7:00]

L. Stephens: What you're saying is that there were no really significant changes in the costs to the minister's office with these reallocation changes.

I would like to move on to ministry operations, vote 18 under Economic Development. Part of the money was to go to administering the major project review process. Does the minister have any figures on the costs since November 5 of the administration of the major project review process?

Hon. D. Zirnhelt: We don't break it out by all the processes. It's possible to do that, but what I'm pulling from here is the cost to the primary industries

section of that ministry. We think approximately half of that is committed to that, because we know how many staff are involved. It's a figure of $207 million, so we think approximately half -- approximately $100 million -- is

[ Page 338 ]

spent by this ministry on that. That was during our term of office.

L. Stephens: Moving down to business development, the money under this category in part went to the running of the office of the job protection commissioner. Does the minister have any figures on the amount of money that went to the Job Protection Commission since November 5, and in what capacity?

Hon. D. Zirnhelt: The figure we have for the four months from November 1 to the end of February is $220,334, and that went to the cost of the commissioner and his staff. Some of that is for special commissioners who may be needed to go into a particular community.

L. Stephens: This was simply administrative costs is what you're saying?

Hon. D. Zirnhelt: Yes, the cost of operating the Job Protection Commission, so it's really staff and associated travel costs and so on. But there are some contractors, because there are special projects where you need somebody right away. They go on contract, and then when they finish the job, they come off.

L. Stephens: As you are aware, the loan and loan guarantee programs administered by this ministry were suspended about April 15 of last year, and evaluating these potential loans is a large part of the work of the ministry. If this work was no longer being performed as a result of the freeze on loans, was there any reassessment of staff resources or any cost savings that resulted in personnel terms as a result of this loan freeze?

Hon. D. Zirnhelt: When I first took over, I asked this very question because it's a good question and I think it's one that deserves an answer. We reassigned people to do assessment of business under the Job Protection Commission. In the case of Pemberton, there was a number of businesses, and we diverted those same people into business counselling activities and project assessment. There was a huge load on the job protection commissioner, and it was increasing; we took over, and it had increased since summer. So it was quite a load, and we had to juggle a few resources in order to make sure.

So I think we can stand here and say quite honestly that the money was well spent and is certainly accounted for.

L. Stephens: We'll turn now to the subvote under regional development. Money expended under this category in the last year was to maintain the government agent service and run what remained of the regionalization initiatives. Can the minister provide a breakdown of how much money went into the government agents, and how much money went to support operation of the regionalization initiatives?

Hon. D. Zirnhelt: This shifted to management services around September. It has shifted since the blue book. The government agents branch now is under management services, and the amount spent since November is $7,500,266. During our term, under regional development, for services to the regions, it's $1,779,940.

L. Stephens: I would like to discuss some spending issues that relate to trade. Was any work performed by the ministry under this heading reassigned to the Trade Development Corporation, and were there any cost savings as a result?

Hon. D. Zirnhelt: No, nothing was reassigned to the Trade Corporation, and therefore there were no savings. I think, by way of explanation, that there is a certain amount of complementarity between the Trade Corporation.... We inherited a Crown corporation set up to do business, and I think they were in the process of revising their business plan -- they are doing that for this year. There will be a certain amount of complementarity of activities because the ministry runs the international offices used by the Trade Corporation when they are travelling. We don't charge between government agencies.

You could argue that maybe we should. But we try to identify costs, and when somebody does something for somebody else, there's a record of that; we know what those activities are. Members of the ministry staff who work in trade will be providing advice to private sector people, information to other governments, and the Trade Corporation. They don't always keep track of their hours, but we didn't assign any portions of the ministry to the Trade Development Corporation.

The Chair: Before the member continues, I'd just like to request that members hesitate just briefly to permit their being recognized in order to assist with the recording of debate. I know that you get anxious to have your dialogue, but it's helpful if we can record properly. So just give me a chance to recognize you.

L. Stephens: Were the trips of the minister and Premier to Japan, and the trips of the Premier to Switzerland and New York, funded through this vote or through the Trade Development Corporation, or through some other division of government?

Hon. D. Zirnhelt: The international travel portion is for all ministers, so definitely for the Premier and me it came out of this ministry's vote.

L. Stephens: Out of the Trade Development Corporation or out of your ministry?

Hon. D. Zirnhelt: Out of the Ministry of Economic Development, Small Business and Trade.

L. Fox: I'm particularly interested in this $86 million of bad debts identified by the minister. Would the minister tell this committee what criteria were used to determine which debts were in the classification of bad debts?

[ Page 339 ]

Hon. D. Zirnhelt: I'm deferring partly on this, but I'll answer what I can. We hired outside independent financial advice to decide where this should be apportioned in the government's books. We used, as you know, generally accepted principles of accounting. The apportionment was decided finally by the agency responsible, which is the loans administration branch of the Ministry of Finance. A package was assigned, and we had it booked against ours. The Minister of Finance is more apprised of a number of things around some of these bad debts because he, through his branch, made the decision on the apportionment. That's why I deferred to him.

L. Fox: I'm rather confused; perhaps it's because I don't understand the mechanism. It would appear to me that if these bad debts were the responsibility of the Finance ministry, then they would have shown up in his budget rather than in your budget. If you can't give me the criteria that your ministry used to determine which debts within your budget were in fact bad debts, you could at the very least identify the category, the programs and so on in which these bad debts occurred.

Hon. D. Zirnhelt: I'd like nothing better than to stand up here and tell you how bad some of these business deals were that the previous government made. You weren't there, but you might have made a bad decision on which horses you hooked your wagon to. I think you want to be careful on this one, because there are some things there that wouldn't be very comfortable.

This is not a write-off. We're not writing them off; we're just booking a provision. The previous government did some things that the accountants didn't think were particularly wise. As a result, their advice was that we'd better book a provision for them in case we didn't collect them. We've decided to take the advice of the accountants, and we have provided for this much. They're booked for potential write-offs, but they are not written off at this point, as I understand it.

L. Fox: I appreciate what you say, and obviously I'm not concerned. Well, I certainly am concerned on behalf of the people of this province with respect to these bad debts. This Legislature, as well as the people of the province, have the right to know which programs have failed, and on what basis they failed.

I have one further clarification to ask of the minister so that I and the province might understand. What is the total loan portfolio of his ministry, and what percentage of that total portfolio is this $86 million?

[7:15]

Hon. D. Zirnhelt: I'll try to get the portion of these loans as compared with the rest, but I think we may be making more out of it than we have to. The total for the ministry is $313,778,214. That includes the figures that we're talking about.

I would like to say that there is some of that that we may collect, and we don't know until we have to collect it. We were advised to place this in this particular place in the government's books as a provision. It's considered a good business practice that there be a certain percentage of high-risk loans that you aren't going to collect. But the process would be -- and I was seeking some clarification -- that if these are written off, they will be accounted in the accounts of the province and the exact amounts will be there. But as you know, collection sometimes goes on for a long time.

For example, if one of these loans happened to.... If we decided we had to collect on it because they weren't meeting the conditions of the loan or the business went down or whatever and we were trying to protect the province's position, then we would be in a position to take certain actions which might involve court actions. The actual final amounts that we finally write off would be a matter of having all the information in, the legal actions completed, the accounting done on it, and then we would have a figure and the government would decide how much is being written off.

This is a provision for debt that may or may not be collected.

L. Fox: I appreciate your comments. It bothers me somewhat, though, when I see something over 25 percent of a total loan portfolio being placed into doubtful loans. I would suggest that an overview of how we give these loans would certainly be in order.

One other factor about them concerns me and that is: what security do we have with respect to this $86 million? What kind of security does this province have to offset these loans?

Hon. D. Zirnhelt: The short answer is: there's as much security as the government can get when they're making these. I want you to know that most of these pre-dated our government. With respect to what the terms of the loans are and so on, members will press for details, but the previous administration did not disclose all the terms of the debts. As a matter of fact, these are often publicly-traded companies and disclosure might have been inappropriate in terms of commercial confidentiality, which I'm sure you understand.

L. Fox: I do understand. I have been fortunate enough to come from a business background. I do understand, as well, that the security held with respect to a loan often determines whether or not that goes in a doubtful category. I guess my concern here is that there has been a very convenient shift, and I'm not at this point suggesting that you're incorrect in making that shift. But there has been a very convenient shift within your ministry to this current year's warrants of $86 million, of which you do not appear to have the details, yet it's on your budget.

I believe that we in this House deserve the answers that would better allow us to evaluate the programs and therefore be more careful about how we enter into your estimates in the next year. We cannot enter into those estimates with any kind of accuracy or credibility without knowing the facts from this past year.

Hon. D. Zirnhelt: It's the responsibility of government to make some judgments about what amounts are necessary to book for provision. There's a judgment call. We did it upon advice from an independent group,

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and we have taken their advice. I would suggest to you that if you want the detailed answers, the loans administration branch was the one that adjudicated the advice and did the paperwork to do it. I'm giving you the details, and I'm standing here saying we have booked this much provision, which we think a good business case can be made for. These are ones for which there probably isn't a lot of security; otherwise we wouldn't have it. If they were secure loans, we wouldn't try to book them off.

I'm not going to disclose details, because in some cases it would prejudice in some cases job protection action where we're trying to be involved in financial restructures, and it would be totally inappropriate. To announce some of these details at the level which you seem to want would jeopardize some of the saves we're trying to make with business. There's no magic here. We have clearly taken recommendations to make a provision of $86 million of statutory appropriation for this item.

I can give you some more details at how we arrived at $86 million, but it is comprised of a number of portfolios, if you will. There's really nothing to hide. This is our guess about what we should provide on the books. Some of this will have accumulated over a number of years of b.s. accounting. I hope you're not sensitive about that, but other members might be. We've said that we want to clean up the books, and maybe this year's going to see some of this stuff booked here so that we can start with a fresh start. We're being up front.

We're saying to you -- this Legislature -- that we need to add $86 million extra. I'll give you the way we calculate that figure. Based on loans administration branch analysis as of December 31, 1991, the reserve needed for loans and investments was $118.5 million. The reserve that was established at the start of fiscal 1991-92 was $36.2 million. Therefore we needed an increase of $82.3 million, plus the provisions for projects not yet included in the loans administration branch of $7 million. The increase needed for loans and investments therefore totalled $89.3 million.

That's $82.3 million plus $7 million equals $89.3 million. The increase needed for loan guarantees was $9.1 million, and the total required for the entire portfolio therefore was $98.4 million.

The amount that the previous government had set aside for these debts was $11.6 million. So they only provided for $11.6 million last year. Okay? This is the year we're talking about: last year, 1991-92. So the difference between that $11.6 million, which the government said we would set aside as provision -- we needed $98 million, so the difference is $86.8 million. That's the figure in additional reserves for potential bad debt that we set aside.

L. Fox: I won't belabour the point, but there are a couple of points I feel I have to make after that last little charge. I find that creative accounting and playing with numbers -- usually any body or any jurisdiction can do it; they find more inventive ways to find it justifiable. I suggest to you that this is not a whole lot different than the so-called BS fund, especially when you gave me the formula by which you determined your doubtful debts.

I guess I have one further question of you. If you will not identify specifically those debts and the security you hold, then perhaps you could identify the categories into which they fall within your ministry.

Hon. D. Zirnhelt: The categories are: ad hoc assistance, aquaculture....

L. Fox: Can you do the amounts in that category?

Hon. D. Zirnhelt: No, not accurately. We'd be happy to try to provide that. It's just not computed that way. The categories are: aquaculture; business expansion program; industrial development agreement, a federal-provincial agreement which has expired; industrial development assistance program; and small business incentive program. Both of those last two are 50 percent provincial.

L. Fox: I didn't intend to ask another question, but this precipitates one. Are you suggesting that in two of these areas of write-off, we're in partnership with the federal government?

L. Fox: To follow that up, am I to understand that the federal government is following your lead with respect to their allowance for doubtful loans? Or does our allowance that you project include any that might be recovered from the federal government?

Hon. D. Zirnhelt: No.

C. Serwa: The minister obviously has very competent staff in the ministry. That staff was responsible for drawing up the parameters and assuring the province that the reserves were all in place when the province put money into these loans. If you won't divulge the specific loans -- which seems to indicate that they tend to be fictitious and that the b.s. that's floating across this room has nothing to do with the budget stabilization fund -- the question is: what is the total amount of security on the $86 million of loans that you have written off? What is your security on that?

Hon. D. Zirnhelt: I sort of warned the member that when he got into some of the decisions that his party made when they were government, if we decided to throw the whole book at him, he wouldn't be able to take it. I'm sure you weren't around the cabinet table when some of these were made. You mention the good staff work. As you know, some of these things were

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probably or possibly made against the recommendations of some of the staff. Because I wasn't in cabinet then, I don't know, but it often is the case that cabinet may overrule officials and make decisions.

We are making decisions based on what we think is probable -- in other words, a best guess -- about what we need to book to have there in case we have to write them off. We would be absolute fools not to leave adequate provision in case some of these loans went bad and we weren't able to collect. Then we would wear it on our deficit.

It's clear that your government is going to be held responsible for anything they can be held responsible for. It's a simple political fact. I don't mind stating that.

[7:30]

C. Serwa: I have asked the minister, and presumably he has the resources at his fingertips, for some specific answers with respect to the interim supply act. That is the matter that we're debating -- not politics but some specific answers to the supply act, the interim amount and the amount that you have grossly exceeded your budget by. You have been government for the past six months. You could have taken necessary actions. Your budget has gone wild in the extreme. You're responsible for your budget, not the Minister of Finance. You approve all of the decisions with respect to loans, Mr. Minister. I want to know the security you hold that the companies have put in.

The Chair: I would just like to request again that members please address their remarks through the chair.

Hon. D. Zirnhelt: I'm quite happy to defend decisions that I'm responsible for, and that's what I will do. As you know, in the process a decision is taken by the government, which is the cabinet, and they are collectively responsible. The fact that it's booked in here means that I have to stand up and defend that figure.

You are asking for information about specific loans and the amount of security on them. You have to treat each one as a separate entity. With this group here we're saying that we have to book a provision for bad debt of this amount of money based on our best guess of all the loans that have been made. That's why we've done it.

C. Serwa: The minister is presumed to be unable to give any.... I'm not asking for specific loans, Mr. Minister; I'm asking for the global security on the amount that you have written off.

The advice that you seem to have received from Peat Marwick has not, in my estimation, been objective or accurate. When we listened to the Minister of Advanced Education this afternoon, the minister indicated that if so much as one payment had been missed by a student, that student loan was written off. That doesn't happen in business. I've been in business for most of my life. That just doesn't happen in the real world. You don't have to make any provision for the write-off of those loans because of income tax purposes. Mr.

Minister, if your security is there in double or triple the amount of loan, you risk no exposure. Now come clean. Tell me on what basis you made this write-off. I have heard nothing yet that supports any of this write-off.

Hon. D. Zirnhelt: Your questioning has to do with whether or not we're making a good business decision to provide for bad loans, and I say that when you've got a recession in the economy, you'd better be careful. If a lot of these were such good business propositions to start with, they wouldn't have come before the government for financing. We're doing the prudent thing, which is to provide for it, but we're not going to assume that it isn't all going to be collected.

The question of security varies from loan to loan. There are different types of securities, you know. Some of them are second positions on a loan. I don't know all the technical

definitions for the types of securities, but there are many types, and some of them require judgment calls. If you're in a second position, what is that worth to you? So we have had the accountants go through that, and they said: "This doesn't look like you're protected by about that much." So there's no question that we're saying approximately what the figure is: 86. That's where we're booking that figure. We're saying that these figures are the figures that can be justified using accounting principles. If you want more specifics, I would be happy to take that under advisement.

I gave you advice with respect to why we arrive at that and the methodology. I'm suggesting that you would get more out of the Minister of Finance.

The Chair: I would suggest to the hon. member that the question being asked is becoming repetitive. The minister has attempted to give an answer, which appears to me to be a repeat of a previous answer, so I would hope that we can move to canvass some other aspect. I think the point has been well made by the member.

C. Serwa: Thank you very much, Mr. Chairman. I agree with you that the minister's answer has been repetitive rhetoric. We're talking finances and figures and budgets, and I expect to be answered in dollars and cents -- in figures, not in political rhetoric. The minister has not in one answer talked dollars and cents.

I have asked the minister a specific question with respect to the security on the write-off. Either the minister has that information, or the minister has to concede that he has simply picked a figure out of the air based on nothing except political gain and has attached it to his budget. The minister must either confirm or deny that. And if he denies that, then I expect to see figures that support the minister's position.

Hon. D. Zirnhelt: Yes, there was a lot of political rhetoric in the BS fund too. If we hadn't had the BS fund and some of the inappropriate accounting practices, we wouldn't be here with my ministry with a large....

C. Serwa: On a point of order. On behalf of the people of British Columbia, it's my responsibility to hold this current government accountable for their actions. I have asked specific and concise questions to that minister, and the minister continues to wander all

[ Page 342 ]

over the block. You're not on your stump farm, Mr. Minister. You're in the real world here in the Legislature of British Columbia, and you've got to answer to the people of British Columbia.

The Chair: Hon. member, please take your seat. Before the minister rises, I would just like to point out that we are debating Supply Act (No. 1), Bill 16, and we are on the

schedule of warrants that were passed prior to the fiscal period that we are just beginning to enter. With all due respect to the canvassing by the member for Okanagan West around this specific question, I believe that our standing orders are quite clear on canvassing that becomes repetitious. Nonetheless, we have to recognize that answers can only be given and accepted, whether or not they are satisfactory to the person who is doing the questioning.

C. Tanner: Point of order. Mr. Chairman, the hon. member is merely asking the minister to identify the type of security that he is using to secure his loans, whether it be property, second mortgages, bank loans or bars of gold. Surely that's not an impossible question for him to answer. It is not being repetitious. The minister hasn't answered the question.

The Chair: Thank you, hon. member, for your point of order. I would just advise the members to keep in mind the constraints of the matter before the committee.

Hon. D. Zirnhelt: When the government decides to write off a bad loan, there is an order-in-council that will become public. There is nothing in here on written-off loans. It's a provision for that; it's a reserve for doubtful accounts. You're asking about the type of security. I'm saying it varies from loan to loan. I'm also saying that the majority of that, this government didn't make. Therefore I'm not in a position to tell you why they took certain types of security. I wasn't privy to the cabinet discussions.

An Hon. Member: He's not asking why; he just wants to know what it is.

Hon. D. Zirnhelt: That's what I'm saying. I'm not in a position to give details. Some of them are preferred shares, some are first and second mortgages, some are promissory notes, some are real property and some are chattels. There are some answers. It varies from loan to loan.

We have taken the advice of an accounting firm as to what those total and, therefore, what we should put in a provision. We have put that in a provision and booked that amount, and that is the amount under discussion.

L. Stephens: I would just like to ask you one question about the doubtful accounts reserves. How is your ministry going to arrive at a figure? What kind of actuarial tables will you use to calculate the amount of doubtful reserves that you will be incorporating into your ministry over the course of the year?

Hon. D. Zirnhelt: I just have to remind you that what the Minister of Finance has said, and what we have all said, is that they're generally accepted principles, and those were accounting principles. Previously, the government was not always using generally accepted principles. As to actuarial tables, I haven't got that detail. If we are using a table, I'll be happy to get that for you. But it varies from deal to deal.

L. Stephens: I'd like to go back a few minutes to the Trade Development Corporation. Correct me if I'm wrong, but I think you said that the trips of the minister and the Premier came under your ministry.

Hon. D. Zirnhelt: Yes.

L. Stephens: Would you be able to tell me the names of ministers who have travelled since November 5, where, the staff or family who accompanied them and the costs incurred; also if there were any contracts, deals or some kind of economic benefit to the province as a result of that?

Hon. D. Zirnhelt: Some of this we don't have immediately because of the time it takes for them to come in. The ones that I know of who have travelled internationally, under my budget, are: myself to Japan, the Premier to Davos, Switzerland, via New York and London; Hon. B. Barlee to Geneva during the GATT negotiations; Hon. D. Miller, Minister of Forests, to Japan with a forestry trade mission; and both the Minister of Forests and I went to Oregon last week. I can get all the details for you. Accounts haven't come in for all of those trips, so we don't have them. But we will be providing most of those figures by way of accounts.

The details on the Japanese trade mission -- that's the one we've got the most information on. That was the largest trade mission. Some of the benefits from the B.C. Week there are that we targeted more than 3,000 clients who seriously visited the centre and talked to people. There was extensive and favourable coverage in Japan about British Columbia, and the basic message was that we're here, we're a new government, up and running, and we're interested in doing business. We targeted a lot of the magazines, both in Japan and British Columbia, and went to quite a bit of effort to get Japanese-language publications to write about British Columbia and doing business here.

Eighty-five percent of the participants in the trade show found new clients, and 90 percent of the participants were successful in meeting influential clients and decision-makers. There have been over 335 new business leads reported to date, with up to 800 anticipated. This is as of March 30, and we had over 190 new leads immediately followed up and a further 77 to be completed within the next six months. There are reportedly over 18 potential joint ventures identified, with an additional 25 anticipated, as a result of that trip to Japan. Did you want more details about some of the other trips?

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L. Stephens: I would just reiterate that if I could get the names of the ministers and staff and so on, and the costs incurred for these trips, that would be great.

Hon. D. Zirnhelt: We will provide that. To my knowledge, there was no family travel, but the rule is that if family travels, it's their cost. In terms of staff, significant staff went on the Japanese trip; minimal staff on the other trips. I need to say that the whole trade mission to Japan was cut down from well over a million and a quarter, I think the figure was, to just over $868,000. It was admittedly an expensive venture, but I think there's no question about the value of it in terms of long-term relations with clients in that area.

Those figures were released during the trip, and we made no attempt to conceal that. But we did cut it back and send only the Premier and me and not the five other ministers projected to go, in order to cut costs but still fulfil our obligations to our trading partner.

[7:45]

L. Stephens: I'd like to take a look at the funding going towards the economic and regional development subsidiary agreements, vote 19. I understand that this is a federal-provincial agreement, and it has been wound down. Was the money over the last year used essentially to pay for the costs of winding this down, or where did the money go from these programs?

Hon. D. Zirnhelt: The easy answer is that those were disbursements from approvals in previous years.

L. Stephens: The vote on the B.C. Trade Development Corporation -- I realize this responsibility has been transferred to the Premier's office, but perhaps the minister has some idea of how much was spent on the corporation up until the responsibility was transferred from your ministry to the Premier's office.

Hon. D. Zirnhelt: I'm happy to provide you with that figure, but we are dealing with what's happened since we have been government on the special warrants. We'll see if we can dig it up here.

C. Tanner: Mr. Minister, if I might take you back about five minutes ago, I'd like to thank you for the information you did finally give us. It took a little while to get it, but you mentioned that your loans were secured by second mortgages, property, preferred shares, agreements for sale, and I think you said personal guarantees. You certainly said four of those five, and I think you said all five. Could you give us a figure, without revealing the companies to whom those loans were given, on what each one of those amounts was for those various forms of security?

Hon. G. Clark: So nice to see you in the chair, Mr. Chairman. I would like to respond to the members, because the loan portfolio is an interesting problem in government. The loans are granted by different ministries and then they get moved over to Finance, the loans administration branch in my ministry, which is responsible.

I've made a commitment, and I'd like to make it again in the House, that we'll be tabling in the House making public all of the loans issued by the previous administration -- the entire loan portfolio -- how much they were for, and the amount of the valuation, any loans we've given -- we haven't really given any but we certainly shall -- and the amount of how much we've written down or provided for in terms of the loan, the aggregate amount of the reserve required for the loans. Just for members opposite.

The Attorney General's ministry has advised us that they -- and I don't want to blame them -- and my ministry as well are concerned about saying that this particular loan given out at this amount of money is written down to this amount, because that would prejudice our ability to recapture or try to gain the maximum amount for the taxpayer. What we will do is give you all of the loans, who they were for, how much they were -- that should be a public record as far as I'm concerned. That's how the federal government operates, and that's how we intend to operate. We're going to release them all, and then we will give the amount of the reserve proportion.

Just so it's clear, the Ministry of Finance is responsible for administering all the loans of government, but the granting of those loans, in some cases, comes under this minister, or under the Minister of Advanced Education when it comes to student loans, and a variety of other mechanisms. But my ministry and the loans administration branch actually administer all government loans.

C. Tanner: I appreciate the answer that the Minister of Finance has given us, but before he came in we had some time eliciting the information from the minister as to what the security was for the loans granted. What we've asked the minister for now is, specifically, not the names of the companies, because I'm not totally convinced that that is public knowledge. While you might be, I have some trouble with it. But we do have the right in this House to know what the security was -- which he has now told us -- and how much that security is in gross amounts, so we are able to make the same judgment that you've made as to the validity of those loans.

Hon. D. Zirnhelt: I'm not sure the member was in the House when I answered. There's very little in this statement that I didn't answer when I was first on my feet. Now if you go back to the Blues you will find that I said "most of it." I didn't say it as well, but I said that, with the exception, I think, of the phrase that said: "The Attorney General will advise on how much on specific ones and commit to table them in the House." But you will also remember that I suggested the loans administration was responsible to the Minister of Finance, that he booked something against our programs.

I stood up and said that the 86 we're talking about here is approximately what we were advised is the unsecured amount. If it was secured, it wouldn't be in here, so this is a guess by accounting principles of how much is unsecured. Now I said all that. Then members persisted. I'm not trying to be repetitious. I was trying to give fuller answers on some of those things. You may

[ Page 344 ]

not have been in the House, but I recall saying that. You can examine the record, and if I've misled the House, well I'm sorry for it. But he just reiterated what I said when I was on my feet earlier on. I don't think there's any contradiction. He disclosed more fully that he would give more detail. But I deferred to him on that very subject -- on the actual administration of the loans and the legality surrounding it -- because those are details that he is privy to that I am not privy to at this moment.

But I am responsible and stand in this House and respond, and I say that our judgment on our professional advice that this is the amount that we should book for potential bad loans and write-downs in the future....

C. Tanner: I appreciate that the two ministers are apparently now attempting to give us the information, and to the Minister for Small Business, I know that this was not your responsibility. I know that you've taken the portfolio over, but I would like to hear your comments on the situation you found when you took over, when you've got one ministry making the loans and the decisions and another ministry administering them. How have you resolved that obvious problem that no business that I know is ever run like that? How have you resolved that problem since you took it over?

Hon. G. Clark: That's an excellent question, and it's more appropriately dealt with under my remarks. But you're quite right. The loans are a bit of a mess. The reason for the major write-downs is there are no criteria really for applying the loans. It's very discretionary -- a lot of political interference. Again, we're doing an investigation trying to get to the bottom of that. But we have an obligation, you're quite right, to try to straighten that out and make sure that any loans or loan guarantees granted have some rational analysis to them.

They're public, and here's why we're doing it and here's the explanation so we can weigh it up objectively and not hide behind secrecy or any kind of political discretion.

We're doing that. We haven't done that yet at this point. The loans administration branch is administering all of the loans. This ministry and others give out loans. They have not given out substantial loans unless they are extensions to existing loans to try to put us in a better financial position. That's an ongoing project, Mr. Chair, which is subject to estimates debate, not really part of today's debate.

The Chair: I want to thank the hon. member who just took his seat. I've been referring to him as the House Leader, but in light of the fact that we are in Committee of Supply, I should refer to him as the Minister of Finance, for the record.

C. Tanner: You didn't quite answer the question. I said: "What steps have you taken to rectify that situation where one ministry is giving the loan and another ministry is administering it?" You just said, if I heard you correctly.... You changed slightly what you said ten minutes ago when you said you haven't given out any loans: you just said you have given out a few loans as extensions to existing loans. Could you tell us, since you've been receiving warrants in the last five months that you've been in government, what those loan extensions are?

Hon. G. Clark: The job protection commissioner still exists. In fact, it's been enhanced in the budget and has existed for the last five months. Where the job protection commissioner moves in, there's some remission on a variety of subjects. Those were subject to order-in-council -- for example, hydro discounts and the like, which are part of the job protection mandate. There has been a modest amount, and in some particular instances, they've been high profile -- the Cassiar mine. The Cassiar mine is a loan which we've dealt with.

But if I can get back to a very important point, which is how we deal with this, we had Peat Marwick review the loan portfolio. They made recommendations. We didn't accept all those recommendations. I'll deal with that when my ministry's up, but we thought they were a bit too conservative because they suggested we write off more. But that's a judgment call, frankly. We had a thorough review of it. We had a review of the approach. We have now struck an investigative team in my ministry to investigate the circumstances surrounding the giving out of the loans, because there does appear to be some political interference.

We're concerned also in the AG ministry. I can tell you we'll be reviewing them as well -- the Attorney General's ministry. But we have not yet formulated a more rational policy for criteria which would apply other than the job protection commissioner, which does and has to allow a certain subjective analysis as to how we might help a critical resource industry. We will be accountable; we'll make sure that any concessions that we give to try to keep alive an industry will be made public and have been made public.

Interjection.

Hon. G. Clark: Well, no. Frankly, we'll probably do it after we make the decision. Within the act there is the ability. The job protection commissioner has certain discretion and makes recommendations to cabinet. We will take issue on them -- and be held accountable by you, I'm sure, member, and by the public. But we've not given up the right, nor do we think we should give up the right, to intervene to try to assist critical industries in tough economic times. That's what a job protection commissioner does, and we want to narrow the scope of that and remove the political dimension if we can.

But we will still be in a position to assist industries from time to time. We will do that; we're not afraid of doing that, but we hope it's on a rational basis, and we'll make anything we do public.

L. Fox: I'm rather surprised. I thought we were discussing the issues of the budget of the Minister of Economic Development, Trade. He seems to be all of a sudden supported by the Finance minister. I don't know whether that's something usual, but it certainly seems

[ Page 345 ]

to take a lot more time -- and probably not a whole lot more in terms of an answer.

I want to clarify a couple of things with the minister. Before I do, I hope the minister doesn't find this as frustrating an exercise as I have found it. It's rather like shadowboxing. We've had innuendos and insults and so on coming across the floor, but nothing has been given us in terms of fact that we can take and put our teeth in in order to come back. I've found that rather frustrating.

I was specifically asking about the loans that you have put in a doubtful category, the loans that have a 50 percent attachment of responsibility to the federal government. I asked you if any portion of the $86 million liability you identified fell on the Canadian government.

[8:00]

Hon. D. Zirnhelt: If you examine the record, I said no. And I say no again.

L. Fox: Sorry. You're obviously in concert with those loans. Did the federal government agree that these should be placed into a doubtful category and that they would take the appropriate action to support you?

Hon. D. Zirnhelt: I think that's a complicated question. Basically, if we make the loan, we're the one that books it. They will provide money to us, and if it's in a portfolio that we then loan out, we're responsible for it. That's the price of 50-cent dollars from the federal government. They account for it by basically wanting to know that it goes into this kind of program with this kind of risk -- in a general way. But as to what portion we're booking under federal-provincial loans, I'd have to dig for that. We don't account for that in this way. But we'd be happy to try and provide that to you.

L. Fox: Am I given to understand that there's no liability to the province with respect to that 50 percent of the loan that was given by the federal government?

Hon. D. Zirnhelt: The answer is no.

L. Fox: One last question. I assure you it's the last one. Earlier today, with another minister, he gave reason for this assembly to believe that he had very little input into the write-offs within his ministry. In other words, it was an edict or a direction by the Finance minister directly to his ministry. Are you suggesting to me, or would you concur, that this is the process that happened within your ministry, that you were instructed by the Finance minister to allow for those doubtful loans?

[D. Streifel in the chair.]

Hon. D. Zirnhelt: Yes, it's a statutory expenditure, and that's basically what happened. That's why I suggested earlier that I would defer some of those things, the process. There's no magic to that. He has his responsibilities and I have mine.I'm answering for mine, and he's answering for his.

L. Stephens: I see that on December 6, 1991, a $1.13 million loan to a silviculture firm, Brinkman and Associates Reforestation Ltd., was approved by the government on the recommendation of the job protection commissioner, and that on March 6, 1992, a $1.5 million loan to Cape Mudge Resorts Ltd. was also approved. My question, Mr. Minister, is have there been any other loans which have been approved on recommendations of the job protection commission, but which have not been announced through press releases or any other way?

Hon. D. Zirnhelt: The answer is yes. The ones that you noticed were loans under the Job Protection Commission; you rightly identified those. Those are ones where it was determined by the job protection commissioner that he could preserve those jobs, and there are a number of others. There's one to Wagner and Teldon for $500,000; there's Creekside Forest Products, $223,000; the one you mentioned to Brinkman Associates; Thuro Logging, $125,000; Presto-Flame fire logs, $115,000; the Cape Mudge one, which you noticed; and then there was one to Fiberco Pulp, which was announced in the last two days, for $10 million. The total: $13,593,000.

C. Serwa: Just a few more questions. Although this part of the debate has been long and protracted, I'm not the beneficiary of very much new information. A decision appeared to be made by the minister and the ministry, whether he was present, whether his staff were present at decision time when they decided on this -- I haven't even determined that. I know nothing about the criteria used. I know nothing about the period of the loans that have been collapsed into this.

The only thing I can really surmise, from the evasive answers, is that the whole thing was constructed, in the event that they're not recoverable, to create the worst-case scenario for the deficit of this present fiscal year. I think that's being unrealistic, not honest, not responsible. I think the people of British Columbia are not going to be deceived.

I do have a question to the minister, though. In some of his opening remarks, he made some comments with respect to Crown corporations and the bad business practices of those Crown corporations. From what I can see, B.C. Hydro, B.C. Buildings Corp. and B.C. Ferries have been well run and are doing a good job. But perhaps the minister would elaborate on the bad business practices of the Crown corporations here in British Columbia.

Hon. D. Zirnhelt: If you asked me a specific question about the Crown corporation that I'm responsible for, I'd be happy to answer that. I talk about business practices, and you saw the ICBC rate hikes. This is the same man who wants to talk about stump ranching. I'm happy to resolve these matters in the way stump ranchers would if you want, but we'd have to do that outside.

The period of loans you asked about dated from the late 1970s, from the best information we have here. The criteria used in deciding were, as I say, standard

[ Page 346 ]

business practices and accounting principles as recommended. I'm sure you're going to get into that when you talk to the Minister of Finance about his estimates.

But we are happy to provide you with information, short of betraying commercial confidentiality. I said that earlier on. I said we can't tell you, because some of these happen to be public traded companies, and we won't give our business assessment of them. We won't under freedom of information. We will use appropriate practices for accounting for public dollars when the time comes.

Under public accounts and that sort of thing we are making attempts to bring budgets in on time and to file reports on time, so that there's maximum disclosure of financial information. That's the business practice of this government, and we're trying really hard to improve some of those practices. We're saying yes, that generally some of the Crown corporations had a few problems, and we're dealing with those. That's why we have a secretariat to oversee them.

If you want information on specific Crowns, then deal with the specific ministers. On the one I'm responsible for, you can ask me questions.

C. Serwa: Thank you very much, although again the response is devoid of any real information. I'm glad that the minister brought up ICBC, because it's a case that exemplifies what we're discussing here tonight. Yes, there were rate increases in ICBC, and what happened? Blame the Socreds. It had been poorly managed. But, lo and behold, they looked and it had turned a dividend. It's non-profit, it should balance, and it turned a dividend in the previous year. It turned a much greater dividend the year before. The fact is that it was healthy.

Why the rate increases? The next thing that they did was blame the drivers for the high frequency and the courts for the high settlements. That kind of wore thin. Then they blamed the federal government. Then the real reason came out -- or a major portion of the reason: the investment income had been reduced dramatically because of the drop in interest rates. Then in the throne speech we heard the final answer: "Crown corporations have to pay." It's just another form of indirect taxation that affects every person in the province.

L. Stephens: I would like to go back a little bit to the job protection commissioner and the list of loans that you were kind enough to give to this House. I have another question on that and it is: would you be able to tell us what securities you've been able to acquire for those loans, if there are any? Or perhaps we should ask the Minister of Finance when his turn comes.

Hon. D. Zirnhelt: The rule we're holding to is that we take as much security as we can.

K. Jones: Mr. Minister, I'd like to ask you a question regarding the Transportation Museum in Cloverdale. I understand that comes under the Pavilion Corporation as far as operations are concerned. I'm looking for a solution....

Hon. G. Clark: On a point of order. The closure of the Transportation Museum was announced in the budget; it's not part of this discussion. If he does want to deal with it, it was announced in the budget, and he can deal with it under my domain, because the decision was made as part of a budget announcement.

K. Jones: The Transportation Museum is an operating entity today and has been throughout this fiscal year. It is accountable within this bill. The Finance minister is totally wrong. He doesn't know what he's talking about, as usual. He wants to interfere with the process of this government.

L. Stephens: I just have a couple more questions for the minister. How many employees did the ministry have on November 5th? How many employees does the ministry employ today? Can the minister supply information on how many employees are on contract to the ministry?

Hon. D. Zirnhelt: Your last question on contractors is on the order paper, and we're compiling answers there. The other two questions -- we'll find it in a minute. You had a query on the Transportation Museum. While we're getting information, I'll give you the basic answer. In previous years, it lost as much as $1.4 million a year. The Pavilion Corporation tried, through their business plan and marketing ventures, to put it on a more businesslike footing so that it wouldn't be losing money. But the museum draws roughly 25,000 visitors a year and is losing $500,000 a year.

In order to cut waste, we decided we would close that museum down. As a matter of fact, we have been approached by the mayor of Surrey. He has some ideas about what he thinks should be done with it. So we suggested that, at no cost to the government, we'll talk. The idea is always to preserve the value of assets, but we can't go on losing money, and we've made a tough decision that we would cut our losses on it. The Pavilion Corporation is actively working with the Minister of Culture. The Pavilion Corporation houses the collection. The Ministry of Culture owns the collection.

So between those two agencies, we're working on an orderly closure and relocation of those cars, trucks and whatever else is in there.

The base allocation of full-time equivalents for the ministry for 1991-92 was 651. The number in employment as of November 5 was 640, and it's still 640. So we didn't increase. Just for your information, we're bringing that down by about 11 for next year.

[8:15]

K. Jones: In response to that information that I hadn't asked for but got anyway, I'd like to complete my question and then carry on with some further questions with regard to the Transportation Museum. I would like to have your commitment that we may have the books on the Transportation Museum. We'd like to have details from you. First of all, what were the total salaries and wages for 1991?

[ Page 347 ]

Hon. D. Zirnhelt: We don't have that with us. I could only give you a ballpark figure, but we'd be happy to provide that to you.

K. Jones: Could you bring that into this session? I think it's very important. It's very important to the people of Cloverdale and to the question of the propriety of the operations of the Pavilion Corporation. The number of staff that I'm being told are actually working there, versus the number of dollars allocated to that, don't exactly jibe.

Hon. D. Zirnhelt: Once the financial statements are audited, we will provide that information. The reports of the corporation will then be available. If you have specific questions, I'm happy to take them, and if you think there's some impropriety, of course we'll investigate that. The general problem with the collection was that despite marketing attempts, it appeared unable to be economic in that area.

K. Jones: I have information that would tend to make one believe that perhaps the decision on economics is not correctly based. Do you have an audited financial statement for the year up to March 31, 1991?

Hon. D. Zirnhelt: You're asking me to be accountable for things when I was not a minister. The annual report is in the public domain, and we'd be happy to provide you with the latest one available.

L. Stephens: Mr. Minister, do you have a figure for the employees on contract to the ministry?

Hon. D. Zirnhelt: I don't have those figures with me. It's on the order paper and will be provided in detail.

C. Tanner: Mr. Chairman, I'd like to ask both the ministers sitting at the table the same question; either one can answer first. I think the Minister of Small Business said that five or six loans were given out recently, or within the last six months, under the job protection branch of your ministry. Would the minister tell this House what he sees as the difference between giving grants and loans -- unsecured, apparently, because he couldn't tell me what the security was -- to secure jobs, which this government does, and what the last government used to do in giving it to business? What's the philosophical difference?

Hon. D. Zirnhelt: That's a wide open question. First of all, we're not doing grants. They're loans. The Job Protection Act provides that upon the recommendation of the job protection commissioner, and only upon his recommendation, the government can provide a loan or loan guarantee or some financial arrangement. That was legislation brought in by the previous government -- the hon. member for Peace River South opposite -- which we supported, as you know. We would have liked to have seen some amendments in it to encompass some of the things we are doing this year.

We feel that the arm's-length distance of that job protection commissioner gives some assurance to us that he is somewhat removed from political interference in the determination of loans. He recommends. We have confidence that by being in the business community and trying to get deals from all parties, he comes in with good advice.

The approach to giving loans.... I think there's evidence of it. We will attempt to ensure that if the government shares in the downside by financing, taking some risks -- some secured, some unsecured -- we want and insist that the government participate in the upside, so when business turns around, we regain the money that's lost. If there is a difference in emphasis, we are pushing that, so the public gets a good deal for the risk it has taken. We're prepared to admit that there are risks, or we wouldn't be making some of these loans, but we attempt to secure them as well as possible.

The financial administration branch insists on a tough deal. That's the Minister of Finance. We get the best deal possible through negotiation and decide on whether the risk is acceptable.

I would like to emphasize that it's really critical that the public share in the upside when things do turn around, and that's got to be built into the restructuring. If a restructuring that's not acceptable is brought to us as one of the parties and we think there can be better terms, we send the job protection commissioner back to cut a better deal.

Hon. G. Clark: The minister handled it superbly. Frankly, the difference is.... The biggest problem in our loan portfolio was with the ad hoc loans that were politically directed over the objections of staff. What we have now is the job protection commissioner making a deal where all parties share in the reduction. There's usually a wage deferral or cut that all the creditors usually share. There are Crowns, and the government comes to the table. We also negotiate so that there's some upside benefit for us.

Only on the advice of the job protection commissioner have we given any loans, and my ministry reviews them with much tougher standards than before. We try to secure as much as we can on them. At no point have cabinet or ministers overturned the decision of the job protection commissioner or given money out in excess of what was requested.

The real problems by and large have been in major loans or grants given by the previous government which really had no foundation. There's quite a substantial difference.

C. Tanner: I would like to congratulate both ministers on that philosophy. It is about time the public in this province enjoyed the fruits of good decisions as well as suffered from the faults of bad decisions.

I appreciate what the minister said, except you didn't quite tell me what you felt the difference was between what you're doing and what the other government felt they were doing, other than the political influence. They tried to make business loans to, I assume, promote jobs, and they obviously weren't as good at it as you claim to be so far. These ministers well know that come a year hence, we'll be looking to see

[ Page 348 ]

how well they've done. Could the minister tell me, other than the political influence, what the philosophical difference between the last government and their government is?

Hon. D. Zirnhelt: We've answered that. When we get into the full estimates we can delve into more of that. We've put on record what we have here. We have not rushed into revising all the programs that were there. We are going through very careful analysis of programs that we haven't renewed, and we will take the time necessary to come up with a re-establishment of criteria and so on.

We're straying a lot from the estimates, so I'd like to concentrate on them in the time left for us. We're almost running our time here if we're going to get through tonight.

K. Jones: Mr. Minister, would you commit to providing access to the books to us members -- from March 31, 1991, to the current time -- so that we may know the status of the Transportation Museum and so that there may be a possibility for a non-profit operation to continue that facility in the future?

Hon. D. Zirnhelt: As I said before, I'm prepared to commit to providing you the audited statements. If the member is suggesting that there is some impropriety, then I suggest that you disclose what you know, and we will investigate it and be accountable for it. Come and see us. We're not going to open up and give you the books; we're going to provide you with audited statements. But if you provide us with information that there's an impropriety, of course....

L. Fox: So much for open government.

Hon. D. Zirnhelt: We've said that there's commercial confidentiality, and I did say "audited statements." That doesn't mean opening the books to every fool who might want to delve into them. I think there's a maximum....

Interjections.

Hon. D. Zirnhelt: I didn't suggest that any hon. member was a fool -- far be it from me to do that. Nor would I suggest that anybody's a stump-rancher. I wouldn't do that, as some members would. Let me just say that we will provide to you whatever information is necessary to get to the bottom of any suggested impropriety, but I want you to be careful. Come and see us, and we'll deal with your concerns.

K. Jones: I appreciate that offer, and I will take you up on it. I would also like to ask the minister if he is aware that a business plan prepared by Coopers and Lybrand was drawn up for the Historic Transportation Society of B.C. -- that's the board that operates the transpo museum. Was that in the hands of the ministry or the Pavilion Corporation? And why was that not considered prior to the decision to cut the museum, since the business plan showed an economic means by which to make the museum very much more viable, with a very good multi-year plan?

Hon. D. Zirnhelt: That report was known by the Pavilion Corporation management, and I think the closure is a budget item. When we debate the estimates, we will get into the decision of closure and debate it then. That's a future action.

K. Jones: How much money was spent on advertising related specifically to the transportation museum during your time as minister?

Hon. D. Zirnhelt: We'll have to take that on notice. We don't have that detailed breakdown.

K. Jones: In order for us to facilitate under the very pressing situation that exists in Cloverdale, with the announcement of the removal of the museum, it's very important that you give that information to us at the very earliest time.

Tonight or first thing tomorrow morning would be most advantageous, so that we can take some of the fears from people and assure those who have been booking the facility and who have helped to make it economically viable -- people who have booked weddings and other social events that raise money in the community to support the facility and lessen the cost to government -- that they will be able to have their event carry through instead of having a cancellation. Will you be prepared to give us that information tonight or tomorrow?

[8:30]

Hon. D. Zirnhelt: I'm not sure exactly what information you want. I said that we'd be happy to share the audited statements with you. If you haven't spoken to the Crown corporation management, I think that you should.

But as for a commitment that we are going to keep it open so that an independent society can try to raise the shortfall of $500,000 a year, I can't and won't give you that commitment. The decision has been made that we will not provide operating subsidies for that. The decision was based on the assessment by the management of the Pavilion Corporation that there was not a business plan available that gave them the comfort necessary. We decided that we would not take the risk and have the public pick up continuing deficits.

K. Jones: Mr. Minister, could you give us an idea of what advertising was done to promote this museum in the past year?

Hon. D. Zirnhelt: The only time there was an advertising program -- and it really was a scam, as you know -- was when some people threatened to paint John Lennon's Rolls Royce. That created such a rush that it was a somewhat successful marketing venture. But that kind of scam just can't be relied on. I'd be happy to try and find the figure of how much was spent on advertising and provide it to you.

[ Page 349 ]

D. Mitchell: I just have a quick question for the minister, and it relates to the business information centre program administered by his ministry during the period covered by the special warrants that we're approving here this evening -- hopefully -- in Bill 16, in the schedules attached to that bill. The business information centre program is an important program. I think the government supports it, in the sense that it was mentioned in the throne speech that the government is highly supportive.

I'm curious, though, about the axing of the B.C. Business Network system during the period covered by the special warrants here. The reason I'm interested in this is: if your ministry and your government is supportive of the business information centre program, why would you, during this period under review, under these special warrants, axe one of the main resources for the business information centre program, one of the main tools used by local chambers of commerce, local business information centres, in terms of building up these centres?

The example that I might offer is in my own constituency. The Squamish-Howe Sound chamber of commerce has experienced phenomenal growth in the last few years -- in fact, 112 percent growth. They attribute that growth specifically to this B.C. Business Network system that has now been axed -- a system that is now used as a model in other provinces. In Alberta and Ontario they're using this as the prototype for their own programs. You say you're supportive of the business information centres. Yet you've taken away one of the major tools for business information centres in small towns. Mr. Minister, could you just comment on how you can justify axing that program, that tool for small towns?

Hon. D. Zirnhelt: We didn't axe the B.C. Business Network. That's part of the Trade Corporation. The Trade Corporation did, and that's part of the Premier's estimates. So you discuss that part with the Premier. The business information centres, though, were not axed. I'd just like to say that there are currently 87 of those operating through the province. Eight-five are run in cooperation with chambers of commerce, and the remaining two are operated in Victoria and Vancouver by the province.

Currently the business information centres handle approximately 80,000 business inquiries, and the Vancouver business information centre handles another 50,000. So that's the volume. We are committed to the program and will try and find ways of making this service available generally at an improved level -- if we can do that.

D. Mitchell: I appreciate the answer by the minister. Just to confirm that I'm interpreting correctly what you said.... You're supportive of the business information centres. They've done an increasing volume of business. One of their prime tools or resources, though, has been taken away by your colleague the Premier, and you would like me to ask the Premier why he's done that when he appears before this committee later this day. Is that what you're saying -- that you have no responsibility for this in your ministry, and that the Premier has taken away the main tool of these centres that you support so strongly? Is that correct?

Hon. D. Zirnhelt: Partially, yes. I'd like to say that we are in the process of exploring other ways of providing that database information. It was an extremely expensive program. We inherited it. We couldn't justify the continuation of it, and therefore it was cut back. If you want to get into that, I'm just suggesting that the appropriate place is to get into a debate with the Premier. But as far as revitalizing and maintaining that service is concerned, we will do everything we can to ensure that a database is available for those business information centres.

W. Hurd: I have a question to the Minister of Economic Development regarding the role of his ministry in the softwood lumber case, in particular the travel allowances and budgets. Were any funds from his ministry allocated to this effort during the period of special warrants in his ministry?

Hon. D. Zirnhelt: I'm trying to find the exact amount. We'll provide that, but yes, we have expended considerable moneys. We contracted lawyers in Washington, we have a number of people doing what you might call lobbying preparation work for us and legal and consulting work in the state of Oregon, and we contribute to the effort in Washington. Since we've come in we've spent $1.668 million. A lot of that is on lawyers' fees in Washington. We have to provide...

D. Mitchell: Shame!

Hon. D. Zirnhelt: We have no choice.

...detailed information. The process is that the lawyers will get a request for information, it's shipped back here, and they tell us what we legally have to provide under the commerce rules. We're trying to build a case. It comes back here for information, and even over Christmas our people were working, putting together volumes of information to build the best possible case.

If you really want to debate what we're doing in softwood lumber we can sure get into that, but I would suggest that the lead in this is the Minister of Forests. We share the responsibility. We could discuss some of that there. I'm happy to answer on whatever we spend. I've given you the figures, and we stand by them and feel that it was necessary. In some ways I wish we had more resources that we could put into it. I think there is some effect being shown for our lobbying efforts. We are getting letters and editorials and are influencing public opinion. I think this concerted effort has a chance of succeeding, but it would be from having given it a pretty good shot.

C. Tanner: This question is for later on when, sometime in the future, my critic's role comes into play in Tourism. You mentioned some trips that were made, but you didn't mention the one made by the Minister of Tourism to Los Angeles within the last month, and I

[ Page 350 ]

think the trip was for about six days. The reason I'm asking you, since you mentioned the others, is that I assume it came out of your department. If it did, could you give me the figures so that I might question the Minister of Tourism when it's her turn.

Hon. D. Zirnhelt: Sorry, simply an oversight. We are happy to take it on notice and give you all the details. I confirm the Minister of Tourism did make a trip dealing in large part with the film industry, which is one of the areas that we have identified as a growth area in our strategic plan. We feel that B.C. is an excellent location for film. The money is easily justified. We'd be happy to provide any details.

I will confirm that all the international travel comes under my ministry, and we have a target budget, which is something we manage very carefully. You'll find when we get into the estimates that we've reduced the amount, generally.

C. Tanner: The reason I'm asking the question is that I want to ask the Minister of Tourism for some results, and to ask for results I need to know the figures. Is there any possibility you could have them for me sometime before.... It might be today; it might be tomorrow; it might be a week from hence when I get to talk to the Minister of Tourism. Will you have those figures for me by then?

Hon. D. Zirnhelt: I can't guarantee that, and I'll tell you why.

Hon. G. Clark: It's because we haven't got the bills in yet.

Hon. D. Zirnhelt: In some cases hotel bills or car expenses will be billed directly, so they're still in the accounts. I'm sure that she'll try and give you as much information as possible. The problem is that if it's an unaudited amount, you're giving an approximate one, and if it happens to be $500 over or something, then you come back. We're very careful about the figures we give out here. If we can give precise answers, we will. If we can't, we won't.

C. Tanner: I'm prepared to accept on behalf of this side of the House a rounded figure -- if you or the Minister of Tourism could give us something like that so that we can make the judgment as to the value of her trip.

Hon. D. Zirnhelt: We can't round it, because all we'd do is give you a budget. We'd give you a budget figure probably, but it hasn't come through the account system. I can't undertake to give it, but we will do what we can.

D. Jarvis: You were asked a question a short while ago, and you were unable to answer it, and the Minister of Finance answered it for you. It's with regard to loans, and you brought up Cassiar. I was wondering if it was in order for me to ask you some questions about Cassiar -- the financing and the loans. Is it in order?

Hon. D. Zirnhelt: It's not in my vote so I suggest you ask the Minister of Finance. We have disclosed quite a bit of information on Cassiar.

The Chair: The next ministry is Education -- and Minister Responsible for Multiculturalism and Human Rights.

J. Dalton: I would almost be tempted to say at this point that it's been a real education. I, of course, wouldn't say that.

Before I direct any particular questions to the hon. minister, I would like to congratulate her on her appointment, not only as the Minister of Education but also as the Minister Responsible for Multiculturalism and Human Rights, and also as the Deputy Premier. You carry a lot of responsibilities, hon. minister, but I know with your background and your experience, particularly in the education field, that you will do great credit to the ministry.

However, I would introduce a note of caution as well. If the number of calls that I've been told have come into my constituency office this week because of budget shortfalls in certain school districts is any indication of things to come, then I think we're all in for some very difficult times, in particular for the school year of '92-93.

[8:45]

I can assure you, hon. minister, that I will do whatever I can to support you in the cause of supporting education. It's certainly one that I personally have a great deal of interest in, given that I have three children in the school system -- and professionally as well. I've been an educator for many years. So I do appreciate the fact that you've been appointed to this ministry, and I know that through a collective effort we can hopefully address these problems, in particular the financial ones, and set things in order.

I have, first, some general questions that I would like to put to you, and then we can get down to some specifics on the votes in your ministry and the interim supply bill we're facing. Can the minister tell this committee how much money has been spent in the ministry prior to her being sworn into office on November 5?

Hon. A. Hagen: Just before I respond to the question from the hon. member, may I perhaps just make a couple of comments, too? First of all, I thank the hon. member for his kind words and to say that I look forward to having a person across the floor from the official opposition who has a strong commitment to education and to a cooperative approach to doing the best for our children in British Columbia. And that, I know, is especially true when someone has children within the school system. I look forward to our debates both within this House and in other domains as well.

I would like also to introduce the acting deputy minister, who is with me this evening, Valerie Mitchell, who will be assisting me in our debate this evening.

Now to turn to the question, the member needs to be advised that the estimates of this ministry were fully canvassed and passed by this Legislature prior to its

[ Page 351 ]

adjournment, and therefore the matter he has just raised is not a subject for our discussion tonight. There are special warrants that have been passed in relation to this ministry, and I would be happy to address any questions that the member may wish to pose in relation to those.

J. Dalton: Actually, all I was looking for was a point of information as a starting point for our questions and discussion this evening, but that is fine.

The next question is this: can the minister tell the committee how much her ministry has spent during the past five and a half months since she took office as the minister?

Hon. A. Hagen: That matter is not a part of the

schedule that we're discussing. The estimates of this ministry were fully canvassed in the last sitting of this House before the election, and they were passed by the members of the assembly at that time. So those matters are not before us; we are dealing with the special warrants that relate to the events in this ministry since the government took office, as the member has noted, on November 5, 1991.

The Chair: Hon. member, I would just remind you to refer your questions to the special warrants.

J. Dalton: Thank you, Mr. Chairman. I am getting to those. Just one more general question for the hon. minister, dealing with the responsibilities within her ministry. Have those responsibilities been significantly changed since she was sworn into office? That is to give us a comparison between the ministry prior to her taking office and the ministry she now heads up -- in particular, I might add, with regard to the responsibilities in not only education but also multiculturalism and human rights.

Hon. A. Hagen: Indeed, the hon. member is correct. This ministry is now not only responsible for education, but also for multiculturalism, human rights and immigration policy and business immigration. So those particular responsibilities have been transferred to this ministry with the reorganization of government that took place with the swearing-in of the New Democrat government on November 5.

J. Dalton: Thank you for that response, hon. minister. I now turn to the various votes within your ministry for '91-92 -- vote 21. Can the minister tell the committee what change in operations has taken place in her office since she has been sworn into office?

Hon. A. Hagen: Mr. Chairman, I would remind the member that these are not matters before us in the current schedules; we're dealing only with special warrants. Those matters were in fact passed by this Legislature prior to the last election.

J. Dalton: I will now turn in particular to the schedules set out in the supply bill, and there are three warrants dealing with education and the other ministerial responsibilities of the hon. minister. Warrant No. 4, November 13, 1991, was for a total of $903,000 designated for the Education ministry. Could the minister please tell the committee what sections of her ministry were the recipients of the special warrant of November 13, 1991?

Hon. A. Hagen: I'm happy to advise the member that the two elements of that warrant are for immigration policy and programs, and for the British Columbia Council of Human Rights. Both of those were as a result of the transfer of those responsibilities to my ministry.

J. Dalton: I take it from that answer that there were no direct expenses as far as education funding is concerned, so I will move on to my next question, also based on the same special warrant of November 13. Could the minister please tell the committee how much each of the aforementioned recipient ministerial areas received -- that is, the breakdown within the ministry itself?

Hon. A. Hagen: The immigration policy and programs division received $563,000, and the British Columbia Council of Human Rights, a total of $340,000. I would note, as the member may know, that those warrants were to January 14 and were for a part of the remaining months of the fiscal year.

J. Dalton: One final question on that first estimate of November 13. Could the minister tell the committee if any of this money went to providing additional staff members? If so, can she designate why that was so?

Hon. A. Hagen: The answer to the question is no. There were no additional staff members on those expenditures.

J. Dalton: I now turn to the next special warrant, January 8, 1992. The line amount designated for the education ministry was $939,000. Can the minister please tell this committee what amount of money was placed towards ministry operations in this special warrant of January 8 -- that is, the allotment of $939,000?

Hon. A. Hagen: None for ministry operations. These special warrants also relate to the two program areas to which we've been referring: immigration policy and programs and the British Columbia Council of Human Rights.

J. Dalton: I have another question related to the same special warrant of January 8, 1992. Could the minister please tell the committee which of the designations within the ministry operations received additional funding as a result of this spending warrant?

Hon. A. Hagen: Perhaps I can assist the member by providing him with the breakdown of the figure $939,000: $600,000 of that was for immigration policy and programs; $339,000 was for the British Columbia

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Council of Human Rights to the end of the fiscal year, March 31, 1992.

G. Wilson: A question to the Minister Responsible for Multiculturalism. I recently attended a dinner sponsored by a local group in Vancouver, which the Premier attended and at which he announced, I believe, a $10 million grant or donation to matters of multicultural settlement. Could you elaborate a little bit on where this money is coming from and how that can be accounted for in this program?

Hon. A. Hagen: I'm happy to advise the member that there has indeed been money -- nothing close to $10 million, although I'm sure that the immigrant settlement agencies that received some funding would have been happy with such a sum. The Premier and I announced an immigrant settlement program in mid-January for a total sum of $1.5 million, which has been disbursed to a wide range of agencies and services throughout the province in the last month.

The Leader of the Opposition is posing a good question in terms of the distribution of those grants. They are grants that have been made right across the province -- in the Okanagan, the interior, the Island, the north, as well as in the lower mainland and, in a broad sense, the Greater Vancouver Regional District, where we have a very large number of our new citizens making their homes and making their livings. I can certainly provide the member by letter, if he wishes, with a list of those organizations that have received grants.

G. Wilson: I welcome that information from the minister. I think it's very encouraging that we're committing some dollars to assist new immigrants to the province of British Columbia.

With respect to this $1.5 million, is it possible to discern how much of that, if any, might be available to immigrant families in the province, who may be dealing with matters such as child custody problems in terms of bringing over family members? Or are there any provisions in that respect? I ask this question because immigration primarily is a federal matter, as we know, and is generally considered a part of a federal program. Yet there are many members of our community who require that assistance, and I wonder if any dollars have been committed in the last year to provide that kind of assistance.

[9:00]

Hon. A. Hagen: The policies relating to immigration are shared responsibilities, and this government is interested in developing the policies and the working relationships with the federal government in this respect. Specifically to the question that you ask, none of the $1.5 million allocated for immigrant settlement programs is related to social service matters or to matters that are a part of the federal jurisdiction in terms of the selection of immigrants.

What we looked to here were programs that were complementary to federal programs and part of our shared discussions about how we can most effectively use dollars and programs for the settlement and support of people coming to Canada and making this place their home.

G. Wilson: I now turn my attention to another matter. I recognize and respect the fact that the minister takes the position that the budget with respect to the Education ministry was preapproved by this Legislature prior to the last election. However, an extraordinary event occurred since the election, and that was the repeal of Bill 82. Even though the legislation has not yet been repealed, certainly the fair wage commissioner has been relieved. There have obviously been commitments made that have to be rectified with respect to the provisions under Bill 82.

They have a financial implication for the Ministry of Education. I wonder if the minister could explain to us precisely how that commitment has been honoured. In the estimates that are before us now, where are any of the financial commitments that may have been made on behalf of teachers with respect to Bill 82?

Hon. A. Hagen: First of all, the piece of legislation to which he refers is the responsibility of the Minister of Finance. Secondly, as far as the estimates that were approved in this House in 1991-92 are concerned, there were no effects pertaining to my ministry.

G. Wilson: I thank the minister for that information. That is useful information for us. British Columbians generally will be interested to learn that the Ministry of Education is primarily responsible for the financing of schools, but the Minister of Finance is

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going to have the purse-strings on teachers' retroactive pay with Bill 82.

I realize that we cannot debate the dollars that were committed and preapproved. But in terms of the provision of educational dollars in that year, could the minister tell us whether or not the committed amounts that were put forward to her satisfaction in the trusteeship of the school districts and boards are an issue that we in this House ought to be taking some concern over? The decisions taken by government on Bill 82 have financial implications that will clearly have been made in the last fiscal year but are going to have to be carried forward to the next fiscal year. I wonder if the minister has an opinion on that.

Hon. A. Hagen: What we're talking about is a continuum, and I'll be looking forward to the debate on the estimates of my ministry when we can canvass these matters fully.

G. Wilson: I thank the minister, and I'll accept that we will deal with that in the estimates.

I have only one further question for the minister, and then I'll leave it to others who may have some questions with respect to past dollars. It comes back again to the special warrant on immigrant settlement. There are a number of initiatives that have been put forward, and one of them that we certainly support with respect to the multicultural component is on health care for new immigrants. I wonder if any of that settlement money provided assistance for immigrant people who had ailments that required immediate medical attention?

Hon. A. Hagen: An unqualified no. These grants had a particular focus that was determined in consultation with the immigrant-serving agencies. They are fundamentally to provide family, youth, women and agency support to assist families in integration. Youth-at-risk programs help peer learning. There are programs to assist agencies in developing their programs. We have not overlapped into the jurisdictions of other ministries, such as the Ministry of Health and the Ministry of Social Services.

We would all recognize that ways in which we can blend and cooperate in our program development would be advantageous, and we certainly will be looking to that as we plan for the future. I'm sure the hon. members opposite would welcome that initiative to find the most effective way to deliver services to the people who are new to Canada and settling here.

J. Dalton: There's one last special warrant question that is certainly eye-catching, because of the amount in comparison to the other two: warrant No. 11, February 28, 1992, for the total of $3,510,000. To the hon. minister: can you tell the committee the breakdown between the extra funding for independent schools and the breakdown for immigration settlement programs?

Hon. A. Hagen: Yes. The $1.5 million that we have been discussing in the last few minutes relating to immigrant settlement programs is in that amount. In fact, the exact amount is $1.525 million for that program, and the remaining amount, $1,985,000, is additional funds to various independent schools. This is related to increases in enrolment, which are funded by a statutory requirement based on, as they say, the number of running shoes that have come through the door for schools that qualify for those funds.

J. Dalton: I thank the minister for that forthright response. Let's deal now with the supplement to vote 24 regarding independent schools. Can the minister tell the committee why there was such a need for an increased allotment to the independent schools and what happened to the projections for student enrolment for the year?

Hon. A. Hagen: As the hon. member may know, adjustments for both public and independent schools are based on enrolment throughout the year, and I am able to advise the member that over the course of last year there was an increase in the anticipated enrolment in independent schools. As I understand it, the figure used in setting the estimates was 5 percent, which had been the figure of the previous couple of years. The actual increases -- and they cover two budget years, because of our March 31 fiscal year -- were 7.9 percent in the fiscal year 1991, and 6.3 percent in 1991-92.

So it's the increase over those two fiscal years that has produced the addition to the vote that the member referred to.

J. Dalton: One further question on that same special warrant of February 28. Was there any requirement within the ministry for additional staffing? Did those funds go at all to extra salaries or staffing?

Hon. A. Hagen: The answer is no.

V. Anderson: One thing is to congratulate both of you on your positions. I'm not envying you the decisions you'll have to struggle with in the next year or so.

I was just curious when I saw the listing as multiculturalism and human rights, with immigration not listed. Is there a particular reason, or is that just the way it happened to get printed?

Hon. A. Hagen: I think there wasn't room on the brass plate on the door. I don't know that I have a good and rational reason that the title doesn't include all of the responsibilities, but I know that certainly in our working relationships with the community the responsibilities of the ministry are well known.

If I might, Mr. Chairman, I gave a not totally accurate answer to the previous question on FTEs, for the last warrant, and any increase in staff. There was an increase of one-quarter of a full-time-equivalent, which was related to the processing of work associated with the immigrant settlement program. I want to take this opportunity to commend the staff of my ministry, who have received plaudits from the immigrant settlement community for the manner in which the applications were distributed and processed, the consultations that were available and the timely way in which they made

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those announcements. They did a fine job and deserve to be commended for their work in this particular project.

V. Anderson: If I understand rightly, these three ministries have been added to your ministry and that's why we're dealing with these warrants.

Having to do first of all with multiculturalism, could you share with me what is the program within the education aspect in the school system to which some of this money might have gone in developing multicultural programming and support systems, such as multicultural teachers or workers, whatever it might be, within the school system itself.

Hon. A. Hagen: I look forward to having that discussion with the member for Vancouver-Langara, who I know is the spokesperson for the official opposition in that matter. But the multicultural programs are not a part of the special warrants; they come out of another program, so they are not a part of our discussion here tonight.

V. Anderson: So human rights and immigration were the two covered by the special warrants. Could you help us to understand at this point how many staff are on the Council of Human Rights and who the staff of that council are; and do they operate independently of your ministry or are they operating within the ministry? I know they have a semi-judicial function, so I was wondering how many there are and how they operate in relationship to the ministry.

[9:15]

Hon. A. Hagen: First of all, I want to thank the member for an excellent question. The B.C. Council of Human Rights is indeed a quasi-judicial body which rules on complaints under the Human Rights Act of this Legislature. So there is an arm's-length relationship between my ministry and that council, since it deals with the matters that come before it in full right as a quasi-judicial body.

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