Hansard -- Volume 20, Number 14 -- Thursday, June 15, 2000

2000 Legislative Session: 4th Session, 36th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 15, 2000

Afternoon Sitting

Volume 20, Number 14

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The House met at 2:11 p.m.

Hon. D. Miller: I would ask all members to join with me in welcoming to the House Doug McIntyre. Doug has Huntington's disease; he lives in Nass Camp in my constituency, in the Nass Valley. He's had a remarkable journey. He left the Nass Camp on May 20, and he has ridden his bike all the way here to Victoria. He arrived last night. It's just a remarkable journey for this gentleman, to highlight the issue of Huntington's disease. I would ask all members to give him a very warm welcome.

B. McKinnon: I would like to welcome to the precincts today David Annis, who is executive director of the Canadian Diabetes Association for the B.C.-Yukon division. David is a constituent of mine, and I ask the House to give him a warm welcome.

T. Stevenson: In the gallery today are a couple of individuals I'd like to introduce. One is my constituency assistant Rick Barnes. And I understand there's a constituent from Vancouver-Burrard, Mr. Peter Seidel, and a friend of his in the gallery as well. I hope everyone will make them welcome.

G. Hogg: There are 15 students from Semiahmoo Secondary School, my alma mater, along with Maureen Linklater, Cindy Barrett, Claudia Semaniuk, Sheila Bensley and Bev Pederson. Amongst those students is one Nathan Christie, who's an avid watcher of us on TV. So I trust the House will please make them very welcome.

Hon. M. Farnworth: I'd like to make an important introduction today, because in the gallery we have Mr. Warren Williams, president, and -- as the member for Surrey-Cloverdale has already introduced -- Mr. David Annis, the executive director of the Canadian Diabetes Association.

A number of members on both sides of this House had breakfast with the association this morning. It was an opportunity to attend a briefing session and to get a better understanding of the importance of the work that the Canadian Diabetes Association does here in British Columbia and right across the country, and the importance of diabetes in terms of a health issue in this province -- because we have some unique factors surrounding the disease -- and the changes that are taking place in knowledge and technology, not only in diagnosing but in treating the disease. So I would ask the House to please make them most welcome.

D. Symons: Today is a special day in that it's the fortieth anniversary, I believe, of the birth of B.C. Ferries. I think it's maybe time that we take a moment to reflect on how B.C. Ferries has grown from a couple of ships and a couple of routes to 40 vessels serving the people of British Columbia and on the workers and all those who have contributed to it over the years. I wish we could commend them today for the service given to the province of British Columbia.

C. Hansen: I'd like to join the Minister of Health in welcoming the delegation from the Canadian Diabetes Association. In addition to those who have already been recognized, I'd like to recognize Peter Fairley, who is the chair of their advocacy committee. Will the House join me in making them all welcome.

G. Farrell-Collins: I just want to add to the welcome that was extended by the member for Vancouver-Burrard to one of his constituents, because as well as Peter Seidel being one of his constituents, he's also a former legislative intern. I understand he's here with his mother

Magdelina from Vancouver-Burrard, and I just want members to make them welcome.

[1415]

Introduction of Bills

MISCELLANEOUS STATUTES

AMENDMENT ACT (No. 2), 2000

Hon. A. Petter presented a message from His Honour the Lieutenant-Governor: a bill intituled Miscellaneous Statutes Amendment Act (No. 2), 2000.

Hon. A. Petter: I move the bill be introduced and read a first time now.

Motion approved.

Hon. A. Petter: I'm pleased to introduced Bill 24, the Miscellaneous Statutes Amendment Act (No. 2) -- a much anticipated act in this House, I might say. This bill amends a number of statutes.

They are: the Assessment Act; the Criminal Records Review Act; the Crown Counsel Act; the Employment Standards Act; the Fisheries Act; the Forest Act; the Forest Practices Code of British Columbia Act; the Law and Equity Act; the Legislative Assembly Allowances and Pension Act; the Liquor Control and Licensing Act; the Liquor Statutes Amendment Act, 1999; the Local Government Act; the Municipalities Enabling and Validating (No. 2) Act; the Ombudsman Act; the Petroleum and Natural Gas Act; the Residential Tenancy Act; the Royal Roads University Act; the Strata Property Act; the Technical University of British Columbia Act; The Bank of Nova Scotia Trust Company Act, 1997; the Transport of Dangerous Goods Act; and the Vancouver Charter.

I will be elaborating on the nature of these amendments during second reading of this bill. I therefore move the bill now be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 24 read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

AGRI-FOOD CHOICE AND QUALITY ACT

Hon. C. Evans presented a message from His Honour the Lieutenant-Governor: a bill intituled Agri-food Choice and Quality Act.

Hon. C. Evans: I move the bill be introduced and read a first time now.

Motion approved.

Hon. C. Evans: Hon. Speaker, this legislation is important to enable our food industry to remain competitive in meeting consumer needs. Ministry staff are working with the agrifood industry to develop policies and principles that will

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be used to administer this legislation. We've made good progress over the course of the last year, and I'm committed to working with industry to complete the work in these areas.

This bill will enable the agrifood industry to establish voluntary certification programs and tell consumers about quality and production standards for B.C. agriculture and food products. More and more, I'm hearing from consumers that they want better information about the food that they're eating. They want to know what's in it and what's not in it, and they want to be able to get the kind of food that fits their needs. This bill gives the industry the tools it will need to respond to consumer demands. For example, under this legislation industry can certify that food does not contain genetically modified organisms and that standards and an auditing system are in place to verify that fact.

The bill also enables industry to gain competitive advantage for B.C. agriculture and food products in the marketplace. The B.C. agrifood industry produces some of the highest-quality food in the world. We have good land, clean air and water to grow it on, and we produce our products using the best environmental practices on the planet. Consumers value these things, and these create marketing opportunities for producers and processors.

This bill gives the industry the tools to showcase the quality of B.C.'s agriculture and food products to consumers and our trade partners around the world. The legislation is a win for consumers and a win for industry. Industry will be able to respond to consumer demands for verifiable information and to demonstrate the high quality of our food products.

Hon. Speaker, I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

[1420]

Bill 26 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

LONG-TERM HEALTH CARE STRATEGY

FOR NORTHERN AND RURAL AREAS

G. Campbell: For years now, patients and health care professionals throughout the north and rural communities have been urging this government to come up with a long-term strategy to solve the northern and rural health care crisis. The government has responded with band-aid solutions, but they've done nothing to address the long-term pressures which are leading to the crisis that is being faced in Prince George today. Patients in the north are being threatened because, like the government, the doctors are failing in their responsibilities.

My question to the Minister of Health is: what is the government going to do to get the doctors back to work in the hospitals and to provide nurses and caregivers with the support they need, so that the people that live in northern communities -- in Prince George -- can get the care they need, when they need it, where they live?

Hon. M. Farnworth: We've been working to develop a long-term strategy that deals with both northern and rural communities and, in particular, with the situation in Prince George. We recognize that there are some unique circumstances around Prince George, because it is a referral centre for northern and rural British Columbia.

That's why we have tabled a solution to deal with some of the key issues that were raised around the retention of physicians and, in particular, around the attraction and retention of specialists in the Prince George area. Part of that involves dealing with the immediate situation through financial incentives to attract and retain physicians -- or specialists in particular -- in Prince George.

A long-term part of that also revolves around the ability to upgrade Prince George's teaching and training capacity as a training centre for medical positions. That's very much part of the long-term plan. That is in place; that's what we've been trying to implement this past week. It's part of an overall strategy that has seen such things as the negotiation of a rural and northern agreement in British Columbia.

The Speaker: The hon. Leader of the Opposition has a supplemental question.

G. Campbell: It's this government that put the system on life support, and it's now the doctors that are pulling the plug. I want to be clear, hon. Speaker. Both of them are wrong.

The crisis in the north has been getting worse and worse. Two years ago we urged the government to develop a non-partisan long-term strategy to restore people's trust and confidence in the system -- confidence of nurses, confidence of caregivers, confidence of patients and, yes, confidence of the doctors. The government has failed on all of those counts.

We said to the government: "We should depoliticize this." We urged the government to bring both sides of the House together and have the legislative committee on health tour the northern communities and establish a long-term strategy that people would know would be delivered upon. My question to the minister is this: why is it only in British Columbia that we have the virtual collapse of a regional health care system in a place as important as northern B.C. and Prince George? Why is it that the government always waits for a crisis before it decides to act?

Hon. M. Farnworth: I'm pleased to hear that the Leader of the Opposition wants to find a constructive solution and wants to work with the government. I would ask him to join us in the message that we have given the physicians today -- that is, to take advantage of the opportunity that is available to the physicians of Prince George by the fact that the BCMA's top negotiator has been up in Prince George to advise them and to work with them on succeeding in concluding an agreement, to join with us in urging the health board that is working with our top negotiator and to get back to the table.

We are willing and ready right now. We have a key negotiator who is willing to do that. The BCMA has its top negotiator up there, who can work with the physicians in order to conclude an agreement. I am confident that with the involvement of top-flight professional negotiators, we can conclude an agreement.

[1425]

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HEALTH REGION BUDGETS

C. Hansen: Quite frankly, the hon. minister should have ensured that his government took those kind of initiatives about two years ago so that we wouldn't be faced with this problem today.

Is it any wonder that we are seeing health care coming apart at the seams in this province? We are now 11 weeks into the current fiscal year, and the central interior health region does not even know what its budget is yet. In fact, every health authority in this province is waiting for this government to tell them what their budget is for the year that we're almost three months into. Will the Minister of Health tell us why it is taking so long to tell the health regions in this province how many dollars they have to ensure that patient care can be maintained not only in Prince George but in every other community in this province?

Hon. M. Farnworth: We have been working with health authorities in terms of identifying their needs, as we do every year, and ensuring budget allocations. That's why there's an increase this year in health care budgeting -- over $560 million.

The issue around northern and rural health care is not unique to British Columbia but is something that exists right across the country. We have been putting in place the strategies to deal with it. We have involved and developed a rural and northern health care agreement to address the needs of small communities in British Columbia. We have been working with communities to identify what other areas the government can develop strategies for -- whether it's around nursing, whether it's around the attraction of specialists and physicians to small communities in British Columbia -- to make sure that they have the health care system they require. We will continue to do that.

The Speaker: The hon. member for Vancouver-Quilchena has a supplemental question.

C. Hansen: Every single province is facing these challenges of health care in northern regions, but this is the only province that allows it to get to a crisis -- where patients are being denied health care -- before action is being taken.

The headline in the Kamloops Daily News sums it up when it talks about the budgets for the health regions. It says that the health budget is on a waiting list. Will the minister tell us today when the central interior health region is going to be given its budget letter for this year? And when will every other health authority in this province be notified of their budgets for this year, so we can bring some stability to health care delivery?

Hon. M. Farnworth: It's interesting that the member raises the issue of budgets, because as I said a moment ago, we are working with the health authorities to identify what the key needs are this year and where the allocation should be going. They will be receiving their budget letters in short order.

This is the same opposition and the same Leader of the Opposition that said $6 billion was enough for health care when the budget at the time was $7.5 billion. That would underfund the system, hon. Speaker.

TREE FARM LICENCE 46

AND REVIEW OF YOUBOU MILL

G. Abbott: The Ministry of Forests is currently undertaking an independent review of the economic viability of TimberWest's Youbou mill. However, at the same time, the Minister of Social Development, the member for Cowichan-Ladysmith, has recently implied that if the mill closes, she will block any transfer of the tree farm licence. I want to ask the Minister of Forests: is he awaiting the outcome of the independent review? Or has he, apparently like his cabinet colleague, already formed his conclusions about TFL 46?

Hon. J. Doyle: I'll say that this government's got a very, very good record when it comes to transfers of wood from one community to another or people asking for change of ownership. Anytime there is a transfer, we put someone in place to listen to the people. In the case of Youbou, there is no one asking to take over their cutting rights or their mill in Youbou. I will wait until that time happens, and I will send my parliamentary secretary out at that time to listen to the people in the area.

The Speaker: The hon. member for Shuswap has a supplemental question.

G. Abbott: I hope the Minister of Forests would agree with me that the last thing we ought to be doing is raising expectations, raising hopes among forest workers in that area that somehow this possibility won't occur, in advance of the independent review. Does the minister agree that unwarranted speculation about terminating cutting rights will lead not only to raising false hopes but also to further poisoning of the investment climate in British Columbia?

[1430]

Hon. J. Doyle: I do believe in the free press and in any member's right in this House to express their opinion, including the member from Duncan. Also, I'd like to remind the member that when the PriceWaterhouse report came out some months ago, the return on capital in British Columbia was exactly the same as it was right across Canada.

RESULTS OF JOBS AND TIMBER ACCORD

M. de Jong: Well, speaking of Forests, it was heralded by the former minister as the greatest announcement of the decade. And the former Premier characterized it as the most ambitious job creation package in the history of Canada. It will be three years ago next week that the NDP government shut down the Legislature so it could roll out its multimillion-dollar ad campaign celebrating its promise to produce 21,000 jobs as part of the jobs and timber accord, Mr. Speaker.

Well, we've checked, and guess what. Guess what: not one additional job beyond 1996 levels. So the question for the Minister of Forests on this, the third anniversary, is: will he confirm that the NDP government hasn't created even one of the 21,000 jobs it promised under the jobs and timber accord?

Hon. J. Doyle: To my sheep-farmer friend across the floor, I would like to say that during and from the time that the jobs and timber accord was announced by the former Premier, there was a major downturn in Japan. We are pretty well back from that now, and I'd like to announce, too, that the

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jobs that were in the forest sector in 1996 . . . . We're right back to where we were at that time, despite there still being a major turndown in Japan, and only 50 percent of that market has come back. I think we're doing very well. I'd say that we've got to say thank you to the investment -- major capital investment -- in British Columbia and a very skilled workforce. We are doing very well, thank you.

The Speaker: The hon. member for Matsqui has a supplemental question.

M. de Jong: That's not what the leader of the NDP said just a few short years ago. Here's my favourite, Mr. Speaker -- the leader of the NDP, the Premier of the day, saying at the time: "This is the biggest announcement that I've ever been involved with. It's the equivalent of six megaprojects." Six megaprojects.

My question for the Minister of Forests is: which of the following megaprojects best characterizes the jobs and timber accord? Is it (

a) the Vancouver Trade and Convention Centre, (

b) three aluminum smelters or -- who could forget -- (

c) three fast ferries? Which was it?

Hon. J. Doyle: I'd just like to speak about something in my own constituency. The member for Peace River South said about four years ago, when the Liberal Party of the day joined the B.C. Reform Party to join him and his party . . . . Let's say in Golden, when that community was down on its knees . . . . He said, as soon as he became a B.C. Liberal, that they would not have participated in the restructuring of that community. This government worked hard to restructure that community. That company was sold recently to Louisiana-Pacific for $90 million (U.S.). This government is doing well. The forest industry is doing very well.

INTERIOR SPORT FISHING INDUSTRY

E. Conroy: My question is to the Minister of Agriculture, Food and Fisheries.

Interjections.

The Speaker: Order, members.

[1435]

E. Conroy: I've seen this minister running up and down the west coast, doing what he does with all the aquaculture folks and with the wild salmon farmers -- you know, doing his job, basically. But I don't come from the west coast, hon. Speaker; I come from the interior. We too have a fishing industry in the interior, and that's the sport fishing industry. I want to know what this Minister of Fisheries for the west coast is going to do for the sport fishing industry in the interior of the province of British Columbia.

Interjections.

The Speaker: Order, members, order. I'd ask the . . . . Order, members. I would ask the minister to make a very short answer, please.

Hon. C. Evans: Hon. Speaker, what an incredibly irresponsible question comes from that member. [Laughter.] This is a serious place. That member has been badgering me. He thinks that government should declare -- get this -- a free fishing day for children in British Columbia. Can you imagine the precedent it would set for people if government said that all the children could go fishing for free? I will resist this member to my last breath -- unless, of course, the other people in the room start to agree with him, in which case I might have to capitulate.

The Speaker: The bell ends question period.

Standing Order 35 Motion

G. Campbell: Hon. Speaker, I rise this afternoon pursuant to standing order 35, as outlined in my letter to you of this date, for the purpose of debating a matter of urgent public importance -- namely, the northern and rural health crisis in Prince George.

It is urgent that this House give a clear direction to the government in this matter. The timing of the debate is critical. An immediate solution to the health care crisis that is facing patients in the north who depend on the Prince George health care system is needed. For over two years this crisis has been simmering in Prince George as nurses, physicians and patients have all tried to get the government's attention. Now the crisis has reached a boiling point, because this government has offered only band-aid solutions. And some doctors in Prince George are now withdrawing their services.

Both actions are dead wrong and need to be corrected urgently. At this point patients in the north are being stripped of their fundamental rights under the Canada Health Act and denied even the most basic level of health care services. That is not acceptable to the opposition and should not be acceptable to the government. It's up to all members of this House to make that perfectly clear to governments and physicians alike.

I therefore move the following motion: that pursuant to standing order 35, the House do now adjourn in order to deal with a definite matter of public importance -- namely, the northern and rural health care crisis.

Hon. D. Lovick: On the motion, Mr. Speaker, it's very tempting for we who inhabit this side of the House to respond with alacrity to that motion and suggest that we'd love to have a debate, simply so we could put on the record what the opposition represents when it comes to maintaining health care in this province, because we know we'd win that debate.

The point, however, Mr. Speaker, is that you -- as we -- are bound by a particular set of rules in this chamber, the rules regarding standing order 35. Standing order 35, as the Speaker well knows, talks not about the urgency of the matter but rather about the urgency of debate. What decides a standing order 35, then, is ultimately the opportunities for debate. We have just completed the Ministry of Health estimates. Today we had questions on this very subject. Moreover, we have been grappling with this perceived crisis for about a month now, I believe, in terms of negotiation.

The conclusion, therefore, is pretty abundantly clear -- that the urgency for debate is not manifest. Rather, we have had opportunities for that debate. Therefore a standing order, I believe, would probably not be acceptable by the rules of this chamber.

[1440]

G. Farrell-Collins: I will respond to the comments of the Government House Leader. He mentions that this issue has

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been simmering for a month, I think he said. In fact, the Health estimates were completed some two months ago. The urgency required under this motion is that this House is about to adjourn for the next ten days or so. There will be no opportunity, tomorrow, next week or anytime at all in the foreseeable future for this House to give direction to the government. That is the need and the reason for the urgency for this debate to take place today. It's important that we don't adjourn this House and leave this issue hanging while the people in Prince George are waiting yet again for basic health care.

Hon. M. Farnworth: We don't need a debate to determine the direction. We know what the direction is, and that is for the physicians to get back to the table and the government to get back to the table, which we are ready and willing to do right now.

The Speaker: I thank all the members for their submissions, and I'll reserve my decision and get back as soon as possible on it.

Tabling Documents

Hon. A. Petter: I have the honour to present the 1999 annual report for the Children's Commission.

Hon. D. Miller: I'm just tabling a report of the northern development commissioner from July '98 to July '99.

Hon. J. Sawicki: I am pleased to table in the Legislature the Muskwa-Kechika Advisory Board annual report for 1998-99.

Hon. J. MacPhail: I have the pleasure to present the 1999 annual report for the Labour Relations Board of B.C. and the '98-99 annual report of the B.C. Racing Commission.

G. Abbott: I ask leave to table documents.

Leave granted.

G. Abbott: I'd like to table two documents, both related to the Enderby television society. The first is the 1999 property tax first demand notice in the amount of $946.84. The second -- hot off the presses, hon. Speaker -- is the 2000 property tax notice in the amount of $1,454.38.

G. Plant: That's what we said it was, and there it is -- amazing.

G. Abbott: Exactly. That's what I said it was.

Interjections.

The Speaker: Order, members.

Interjections.

The Speaker: Members. Would the member for Richmond-Steveston come to order.

Orders of the Day

Hon. D. Lovick: I call Committee of Supply in both chambers. In Committee A, we will be debating the estimates of the Ministry of Employment and Investment; and in this chamber, we shall be debating the estimates of the Ministry of Finance.

The House in Committee of Supply B; T. Stevenson in the chair.

The Chair: We will take a short recess until ten minutes to three.

The committee recessed from 2:44 p.m. to 2:54 p.m.

[T. Stevenson in the chair.]

ESTIMATES: MINISTRY OF FINANCE

AND CORPORATE RELATIONS

(continued)

On vote 30: ministry operations, $104,761,000 (continued).

Hon. P. Ramsey: Just before lunch we were talking about the implementation of the Deloitte study. I'm pleased to provide the opposition with a copy of my letter to all Crown corporations earlier this month talking about the Deloitte study, the legislative amendments that are going into place as part of Bill 18 and the establishment of both a policy advisory committee and a steering committee and working group to make sure we are implementing it.

[1455]

The member is also asking about ICBC's involvement. ICBC is not part of the overall project steering committee, for the following reason: what we sought to do is have on the steering committee those who are responsible for the great majority of the $3 billion in capital spending that is taking place in this province this year. Those on the steering committee represent responsibility for some $2.6 billion of that expenditure.

I would also point out to the member . . . . ICBC is simply not a large player in capital construction in B.C. If the member is concerned with the Tech B.C. project, that is captured by the participation of the Ministry of Advanced Education, Training and Technology.

G. Farrell-Collins: I guess we'll pursue that further, if we need to, with the ICBC estimates at the time they arise. What I really wanted to get from the minister, I guess, was a sense of how that's coming along as well as what sort of changes have been implemented in anticipation of that within the various Crown corporations. What actions have they already taken, knowing that this is coming down the pike? Has there been a change in procedures at the Crown corporation level in anticipation of this policy?

Hon. P. Ramsey: What the Deloitte study said is that we needed an overall framework for management of capital projects, both ministry capital and capital that was under con-

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struction by Crowns. We needed an overall framework that incorporated best practices. That's what has been worked on -- the overall framework. So that's really the goal here.

I'm not sure I can go too much further than that. As we debate the estimates of individual Crowns, there's ample opportunity to ask them specifically both how they're working with the policy implementation process run by the Minister of Finance and what they're doing internally.

What the Deloitte study found is that there was a variety of both good practices and practices that needed improvement in the area of capital. What they recommended to us was that we bring all up to the same level by developing an overall framework and putting best practices in place. That's the work that's going on right now, and as I said, we expect to have the implementation plan ready by the end of this month.

G. Farrell-Collins: I assume that the best practices will be applied to projects that are currently underway as well as future projects. Is that correct?

Hon. P. Ramsey: You know, part of the problem here is not knowing . . . . The outcome of this implementation group is to establish agreed-upon best practices right across the piece. Absent that, it's a little difficult to say whether it's going to be applied to every project that's now underway. I'd also point out that for projects underway, obviously the front end of it, which both Deloitte and the Budget Transparency and Accountability Act speak to, of identifying high-risk projects, making sure that you have sufficient work done on those . . . . It's a little difficult to retrofit that, though we're doing the best we can.

The other thing I'd point out is that we are quite determined to move expeditiously on this. The Deloitte study said . . . . Their recommendation to us was that it would probably take 18 months to do the implementation they recommended. We're determined to do it faster than that. The movement to introduce legislation this session illustrates that. Our commitment to get this implementation plan completed by the end of this month also demonstrates our determination to act expeditiously on the results of the Deloitte study.

[1500]

G. Farrell-Collins: I guess the concern I have is that if a project or projects are . . . . Even though they're underway, if there are inherent problems in them that should have been flagged earlier but were not, they're going to come up. They're not going to disappear. We know from experience that that happens. If there are problems that exist there, it would seem to me that part of this process would be, yes, to go back and say: "These are our best practices. Yes, we didn't do this assessment and quantify that risk or identify that risk initially, and yeah, now we're into these projects.

But we should at least go back and try and quantify those risks and see if we're there, rather than just continue to fly blind on projects that are underway and wait for them to blow up in our faces."

That's really what I was looking for: is there going to be some sort of a retro-assessment of those projects that are out there right now, to be able to determine whether or not there are identifiable risks that . . . ? Yes, we may have jumped in and taken them, but at least we know what they are and perhaps will be able to manage them better as time goes by.

Hon. P. Ramsey: I think the member and I are in agreement on the principle that you don't wait for brand-new projects, that you find out what you can apply and start putting it into place right away. I think we're in agreement on that. My only point was that absent the outcome of the implementation work and a plan for implementation, it's difficult to get specific about what can be applied and to which projects.

I'd also point out that for the ones that I think the public is most concerned about, some of the high risk is because of the magnitude of the project -- initiatives such as SkyTrain. The Deloitte study had, I would say, some reassuring words about the level of accountability and reporting that's in place. The SkyTrain project, as the member knows -- I think we had the Transit debates yesterday -- are actually posting their quarterly external review of progress, budget and whatever on the Web for anybody to take a look at. So the openness is there that I think would meet the test -- I assume would meet the test -- of what comes out of the implementation study.

G. Farrell-Collins: Obviously we will be watching that closely and seeing how it progresses over the next little while. I'll be marking my calendar for June 30 and awaiting the implementation plan. I hope I don't have to come in here the next week and ask about it. We'll see how it goes. I assume everything's on track.

My colleague from Okanagan West has a question which concerns a capital project -- a school project -- within her constituency, which . . . . My understanding is that there's a conflict between the Ministry of Finance and the Ministry of Education. Given the minister before me, I thought you'd be uniquely suited to respond to the question. If we're unable to find those answers now, then perhaps we can get them later.

S. Hawkins: This is an issue, I know, that the minister is well aware of. I believe this is probably the fourth or fifth time I've raised it in the House with this minister. It's the Kelowna Secondary School issue. I was pleased to hear from the Minister of Education . . . . There was an issue with respect to whether the funding would come through for the completion of the school if the sale of the land that school now sits on didn't sell for the price that was estimated. The Minister of Education's assured me that the school board won't be left short.

I know it's a complex package where land has to be sold. There are deals with the college, there are swaps -- all that. I know there was a question with parents who were quite concerned that we might get left short and that at the end of the day the local taxpayers would be picking up that tab. But the Minister of Education assures me that that's not the case and that the government will come through on that. That issue, I hope, has been laid to rest.

The second one is a little complicated. I know that the minister would probably like me to go away, because he's sick of dealing with this issue with me, I'm sure. But another concern has arisen this year, just as we start cleaning up the site and cleaning up the issue. Last year I believe it was the environmental impact study that we were discussing. Well, this year the city of Kelowna has a concern.

[1505]

Let me assure the minister that none of the parties -- the school, the parents, myself, the city and, I'm sure, the government too -- want to see this school stalled. We want to see this school built. There is a dire need. We want to make sure our kids are in a safe place for learning.

[ Page 16667 ]

The problem is that there are two parcels of land on the site that is supposed to be sold, which the city says they transferred in trust to the school board. These two packages of land . . . . One was transferred in 1947, and one was transferred in 1966. I don't know if the minister has been around that long. Anyway, the city does have documents, and I know they've met with officials. The concern is: what are we going to do?

There's obviously an issue here now with who owns the land. The city thinks -- and they've got documents to back it, minister . . . . They've got by-laws, they've got maps, they've got documents that show that the land was transferred in trust. I believe there might be a little hitch where land titles didn't register it on the title. Perhaps that's what the minister is relying on when they might deny the city the land that they transferred in trust. Maybe he can clarify that for me. But there is a question here.

None of this is being raised to stall the completion of the school. The city makes that very clear. I believe that what the city is saying is that at the end of the day they would like to see that land stay zoned for school purposes. In order to have a healthy community, they want to see families and children downtown. They don't want the downtown to turn into a place that's not friendly for kids and families. So that is their purpose of raising it with the minister. They want to clarify the situation. They do not want to see the school stalled.

I would ask the minister, first of all: what's his recap of this situation? What discussions have they had with the city? What legal documents is he relying on? And has there been a decision made, or are there more meetings that are going to happen to decide this issue?

[J. Cashore in the chair.]

Hon. P. Ramsey: As the member says, she and I have debated the legitimate desire of the people in Kelowna to see a new Kelowna senior secondary for four years now -- three years in my previous portfolio.

Interjection.

Hon. P. Ramsey: We're early this year; she's quite right.

The Chair: Hon. members, I'd really like to have these comments on the record.

Hon. P. Ramsey: Let me say this, first of all. There are apparently a number of issues to be worked out still, as far as legal liability and responsibility for the cleanup of the environmental issues on some of the new site and some of the issues around title on the old site for KSS.

Neither of those issues is going to retard the issuing of tenders for the new Kelowna senior secondary in August of this year. Staff are quite confident that we will meet that time line. These issues do not need to retard that. So that, I think, is the positive message for students and parents and people in Kelowna.

As far as what the actual resolution will be as to the land title, we will have to wait and see. I don't know what the member opposite was doing in 1947; I was three years old.

Interjection.

Hon. P. Ramsey: She wasn't doing anything, I hear.

This is indeed yet another interesting piece of this. As the member knows, this was probably one of the most frustrating projects to get going that I experienced in my time as Minister of Education, because there seemed to be a new preferred solution from the school board and the city and the community every six months. I think we have everybody walking on the same line. I'm sure we do. Tenders will be done this August. We will get that project underway.

[1510]

S. Hawkins: I'm glad the minister clarified that this will not stall the project. That's good news. I wonder if the minister would keep me apprised of what's happening on this file. I would appreciate that. I know that the officials from the city are very interested in meeting with the Ministry of Finance. I would hope that the minister would accommodate their request, and hopefully we will come to a good resolution where we meet the city's needs as well. I think that is a good goal to have: to keep the downtown revitalized with families and kids.

I thank the minister for his time.

K. Krueger: I wish to make an introduction.

Leave granted.

K. Krueger: With us in the precincts today -- I trust they're up above me; if not, they are somewhere nearby -- is a class of 40 grade 7 students from Arthur Stevenson Elementary school, their teacher, Mrs. P. Sharpe, and five adult companions. I'd like to ask the House to please make my constituents welcome.

G. Farrell-Collins: We're now ready to ask the questions on the sinking funds that we had talked about earlier. My colleague from Kamloops and I did get a briefing from the debt management people, which we appreciated. I understand that my colleague has a few questions that he would like to ask on the issue as well.

K. Krueger: I have in my hand the

schedule of repayment for the sinking fund for the Clearwater improvement district. These moneys were borrowed in 1981 to put in a water system and the total borrowed was $125,000. The

schedule shows that at the end of the payment period, which is a 25-year period, the Clearwater improvement district will have paid $492,000 in interest, plus a little. In fact, it will have repaid almost $516,000. Yet because of an apparent mistake with regard to the sinking fund factor, they will still owe a balance of over $63,000 -- more than half of what they borrowed -- in spite of having paid four times as much as what they borrowed.

I do appreciate the briefing that was given to us, but I would like the minister to account to my constituents on the record for how this could have happened.

Hon. P. Ramsey: As the member knows, this is a historical artifact, almost. These rates were set in the 1980s. The prevailing interest rates at the time they were set were in the order of 15 percent. I surely remember those times. At the time the fund was set up, a rate of return at 12 percent seemed

[ Page 16668 ]

reasonable. In the era of the single-digit interest rates that we are experiencing here in the late nineties and the early twenty-first century, it doesn't seem so reasonable. Hindsight is always 20-20 in these. I don't intend to do anything other than just try to set the record straight on what was done in good faith, I think, by all parties at the time.

K. Krueger: It's true that a sinking fund factor of 12 percent at the time was not unreasonable, because those earnings were coming in. Since then, of course, things have changed substantially. As I understand it, the ministry employs professional debt managers to watch for these events and to deal with them when they begin to arise. Yet the Clearwater improvement district wasn't alerted to the problem until it received a letter from this ministry dated July 7, 1999, that had been written to the Ministry of Municipal Affairs, which didn't bother forwarding it to the CID until February 2, 2000.

As the end of the time period approaches, where the Clearwater improvement district had quite legitimately believed that this debt would be paid in full, they find to their consternation that they are still going to owe more than 50 percent of what they borrowed.

[1515]

We had an exchange in question period on May 16 about this, and the minister said that perhaps I would like to talk to the person who was Minister of Finance on December 11, 1981. I think that in retrospect and outside the heat of that moment, he would agree that it was a perfectly reasonable number to use in 1981. The problem has arisen because the sinking fund factor wasn't changed subsequently. The Clearwater improvement district is run by volunteers who are elected locally. They do have an audit every year.

But none of them really have the responsibility to review this question, nor would they have had any reason to do so, because they're trusting the senior government to be protecting their interest and fulfilling its fiduciary duty.

Can the minister explain why those professional debt managers failed to alert the Clearwater improvement district well in advance of the letter that was written in July 1999?

Hon. P. Ramsey: I'll say this: improvement districts have been receiving annual account balance reports from the debt management system. What the member is saying, I think, is that somehow the import of those was not fully recognized at the improvement district level. Since then, the provincial treasury has tried to assist by creating additional analytical reports that do the analysis, really, for the district, rather than have the district rely on their expertise within the district. I think that's what the member is referencing that happened in 1999 -- a fuller report. But there was information provided.

The import of the analysis -- from the member's questions and obviously from the concerns of his constituents -- wasn't fully understood at the time. The provincial treasury has now sought to make sure that we are providing information on additional payments that the individual improvement districts could make voluntarily, if sinking funds are estimated to fall short at maturity, and on other options that they have.

K. Krueger: The debt management branch, as I understand it, charged a fiscal agency fee at the time of the debt issue and has charged a further annual what's known as a "funds management fee" ever since to this and other improvement districts. They presume this to mean that they are paying those fees for this ongoing professional service. Is that accurate?

Hon. P. Ramsey: Yes, they do pay the fee that the member describes -- the fund management fee.

K. Krueger: Then, does the minister not agree that it's reasonable for them to expect much prompter advice when problems like this begin to arise? The document of July '99 that I referred to was actually a letter from this ministry to the Municipal Affairs ministry alerting them. Clearly the Ministry of Finance perceived that even the Ministry of Municipal Affairs didn't know about the problem, let alone the improvement districts. The Municipal Finance Authority itself -- since 1971, as I understand it -- has used a 5 percent sinking fund factor and has been able to demonstrate a surplus. As I understand it, all of their funds have come to fruition.

[1520]

Considering that the one ministry has been doing the job so differently and that this ministry has been paid to do the job for this improvement district and others, doesn't the minister agree that people in Clearwater have reason to feel that the provincial government let them down badly?

Hon. P. Ramsey: I was with the member right up until the last question there.

What has happened here is that annual reports were being sent out. The import of those and the necessity for dealing with what those reports said, as the member says, was something that the Clearwater improvement district did not recognize.

What the ministry has now done -- as the performance plan that we're actually debating here talks about -- is said that we want to improve the service we offer to clients. The provincial treasury and B.C. Investment Corporation have started to send out an information package on sinking funds to ensure that all clients fully understand what the funds are, how they work and explain the options available to improvement districts to deal with any projected shortfalls in their sinking funds.

I mean, I must reject the idea of negligence on the part of staff. I think they have been working hard in the past to make sure that accurate accounts reports were received. They've been working hard to improve the services they provide to clients.

K. Krueger: On May 16, when we had an exchange in question period about this matter, the minister said that the Ministry of Finance is working with the improvement districts to find a solution. He spoke of one option a few moments before. What other options are available to the improvement district and others to get themselves out of this box? One that had been offered to them by letter was to reborrow the amounts that will still be outstanding when this bond issue is complete. That clearly isn't something anybody's happy to hear about. I'd like to know what other options the minister suggests.

Hon. P. Ramsey: It's difficult to find a great number of additional options. I think the two that do refinance for a

[ Page 16669 ]

longer period really would be extending the period or term of the debt. The other one would be to increase contributions, to retire it at the expiry or at the maturity date, which I believe is 2006 for Clearwater. Also, there is that opportunity, for the next five years, to simply do that. I would say that several improvement districts have set aside reserves of their own to deal with it, once their analysis showed that the rates of return for these instruments from the early eighties were not going to be sufficient. So I think that the options are there, and the Ministry of Finance will continue to work with the Clearwater improvement district to identify one that works for them.

K. Krueger: The affected improvement districts, as I understand it, have all relied on a bylaw that was signed by the inspector of municipalities of the day. This bylaw clearly states that if the payment

schedule compiled by the government is followed, a sinking fund sufficient to retire the debt will have accumulated at the time of debt maturity -- enough to retire the debt. The improvement districts have been expected to comply with this document and the payment

schedule supplied by the Ministry of Finance, and they have done so in good faith.

[1525]

The Clearwater improvement district put it to me very bluntly that it feels the government of British Columbia must stand by this official document, which was signed by its representative of the day. I think if the minister or myself or anyone in this House had a deal with a bank that was signed and if we kept our end of the bargain, we wouldn't stand for still owing more than half our principal when the loan was supposed to be paid out.

Hon. P. Ramsey: Staff do not have with us a copy of that bylaw. I'd be pleased to have them review it with the member and advise him of their reading of obligations under it.

K. Krueger: When the staff reviews that document and if the Clearwater improvement district's position is valid -- that the document exists and says what I just quoted them as telling me it says -- would the minister agree that just as

in the present session of this Legislature, we've been enacting legislation to oblige lending institutions to fully disclose the cost of credit right at the start and to conduct themselves in accordance with

contracts, presumably the government must have a look at that too.

I see that the government has at least two options that the minister hasn't talked about today. One is to absorb the outstanding principal when this debt is supposed to be retired. The other is to look at buying back the current debt and reissuing it at a lower rate of interest -- the interest currently being paid is 15.75 percent -- and using the associated interest savings to offset the predicted shortfall. What does the minister think about those options?

Hon. P. Ramsey: First of all, I'm not prepared to comment on what action would be required by government pursuant to the bylaw that the member has quoted until we have had a chance to review it and assess its import. As far as other options, the difficulty with asking central government or Finance to absorb or refinance -- and really, at the end of the day, they amount to the same thing -- is the inequity of treatment with other districts that borrowed money under the same rates at the same time, analyzed their positions and dealt with what I think the member and I agree was an unrealistic anticipated rate of return.

Without casting that very broadly, it's hard to figure out how to deal with the few districts that have found themselves in the predicament of the Clearwater improvement district. So I do not think that the simple absorbing works. It wouldn't be just a few districts. I think there are around ten that had these early eighties debt issues with unrealistic rates of return.

K. Krueger: The critic has sternly advised me that I only get one more question, so I'm going to lump a couple together here. Actually, I just wanted to give the minister notice that my colleague from Okanagan-Penticton has a very similar situation with the West Bench improvement district. Of course there are others as well.

I do want to have it firmly on the record that the Clearwater improvement district feels that this is both presently a breach of fiduciary duty on the part of the senior government and potentially a breach of contract. Just to clarify the record from May 16, in answer to one of my questions in question period the minister had suggested that the bond was actually issued "to the school district in the region." I gather that was in error, and I wanted to have the minister clear up the record. That will conclude my questions for now.

[1530]

Hon. P. Ramsey: I must say that the opposition critic has managed to find a way of limiting the questions of the member for Kamloops-North Thompson. It's something that no one on this side of the House has been able to manage in four years.

In his references to the question period exchange that we had back in May, the member is right; I was briefed incorrectly. The actual sinking fund instrument is not held by the school district in the region, but by another one. However, it is the case that that school district is relying on that instrument. The fact that there are two parties to this remains true. What is of benefit to one may be of detriment to the other.

G. Farrell-Collins: I have one last question on the debt management side. I was looking through the performance plan for the ministry, and I noticed that there are no goals set for debt management plan targets, those types of things. Is that something you've decided not to put into the performance plan -- setting targets for debt management and then reducing debt over a period of time? Is that something the minister has decided not to put in his performance plan?

Hon. P. Ramsey: There are a number of areas in the performance plan where the ministry's looking at how to minimize borrowing costs. In other words, for the same amount of borrowing, how do you reduce the costs on the borrowing side? What the member is talking about, of course -- you know, what the debt management plan is -- is actually contained in the budget documents for the year 2000. What we did, as we did in 1999, was set a range of 22 to 27 percent of GDP and track where we were within that. Last year we set a target, if memory serves, of 22 point . . . . Frankly, my memory has failed.

We came in around 1.5 percent better than the debt-to-GDP target that we set. We hope that as the economy continues to improve that will stabilize and will decline, as the budget documents showed.

[ Page 16670 ]

G. Farrell-Collins: I have no further questions in that area. My colleague from Coquitlam . . .

Interjection.

G. Farrell-Collins: . . . or Port Moody-Burnaby Mountain -- another reason why you could never make me Speaker; I can't remember the names of the ridings -- has a few questions for the minister on a different topic.

C. Clark: I'm all for making the member for Vancouver-Little Mountain Speaker of the House. I think he'd do a terrific job.

Anyway, my questions are about PSEC. I want to start at the top, but does the minister need to get staff for that? Should I wait a moment?

Interjection.

C. Clark: Okay, good. This may be a question that the minister can answer without staff's assistance.

PSEC has been through a whole host of people at the top since the government came in, in the last decade. It started with Gary Moser. They had Gary Moser; they had Russ Pratt. They both got shuffled off, and then they had Bill Adams. Then they shuffled him off, and now they've got Gary Moser back again. So what happened? Maybe my first question should be: what happened? Why did they shuffle off the most recent guy and bring in a new guy?

Hon. P. Ramsey: I was just trying to confirm with staff my understanding of senior personnel. PSEC was established in '93 as a result of the Korbin commission. If memory serves, the first CEO of PSEC was Linda Baker. Mr. Moser was, I believe, second in command or vice . . . . I can't remember what the official title was at the time. Mr. Moser then was offered and accepted a role as CEO for the Health Employers Association of B.C. and has worked there until last week. We have moved to ask Mr.

Moser to assume the chair -- the duties of CEO and secretary to the council of PSEC -- on an acting basis, and he has agreed to do so. I believe Mr. Moser is well respected in the public sector employers community and will do an excellent job in that role.

[1535]

C. Clark: The minister didn't address my question, which was: why was Bill Adams replaced?

Hon. P. Ramsey: I don't discuss personnel matters in this chamber. It was a decision made by the council. The CEO is employed by the council. This is not an OIC; it is employed by the council. The council took a decision to ask Mr. Adams to step aside and ask Mr. Moser to assume the duties as CEO.

C. Clark: Did the council take that decision with any involvement from the minister or the minister's office or the executive council of government?

Hon. P. Ramsey: It certainly did.

C. Clark: What was the severance that Mr. Adams received?

Hon. P. Ramsey: The work on determining severance for Mr. Adams is currently underway. I don't have a final figure to provide the House or the member.

C. Clark: Can the minister tell us what parameters he's considering the severance package within? Is it going to be within guidelines? Is it is going to be just a monetary package? Is it going to include other incentives in the package? What is the minister considering at the present?

Hon. P. Ramsey: It'll be within the normal guidelines for severance for deputy ministers.

C. Clark: Will the minister notify the public as soon as that severance package is concluded?

Hon. P. Ramsey: My assumption is that the public is entitled to know the details of severance arrangements. I'll endeavour to find a vehicle to make it public.

C. Clark: When will those negotiations be concluded?

Hon. P. Ramsey: I would hope expeditiously. I don't have a firm date.

When someone in any position of employment decides to leave a position, they usually do it after they've negotiated some kind of a package, or there is some kind of agreement, some kind of understanding, of the terms under which they will leave. If Mr. Adams is in limbo at the moment, where is he? Is he currently continuing to be paid by the government while we're also paying Mr. Moser? Has he taken another position in the government while he's waiting to conclude his agreement? What's his status while he's in limbo?

[1540]

Hon. P. Ramsey: This is a personnel matter; this is under discussion with Mr. Adams as we talk. Mr. Adams is not going to be an employee of the government. He has not been offered another position. Discussions on . . . within the guidelines for severance for deputy ministers -- what he is entitled to under his contract -- is being worked out. I'm not going to discuss that in this House. I will commit, as I have, to make sure that the severance arrangements are made public.

C. Clark: All right. So Mr. Adams is out; Mr. Moser's in. Mr. Pratt was out not so long ago, but he was the guy who pretty much got us to where we are with the public sector negotiations that we've had. Now, maybe the minister can tell us: what were Mr. Pratt's qualifications for the job, given that today we are going to be very much discussing the product of his work?

[ Page 16671 ]

Hon. P. Ramsey: I'd be pleased to provide the member with Mr. Pratt's résumé some time. I don't have it with me in the chamber. He has a lot of experience in negotiations, and I'm very pleased that he has served PSEC well for several years. He has moved on to other things; we have Mr. Moser there.

I think this is a good signal for the employers councils of the province. We had a PSEC meeting this morning. Mr. Moser was . . . . I think his appointment was well received by the employers organizations of the broad public sector in British Columbia, as we begin the work in preparing for the next round of public sector negotiations.

C. Clark: Mr. Pratt certainly did serve somebody well; that's for sure. He got us to where we are today in terms of the public sector agreements we've got. There are some serious questions about how we got here that I want to examine for a few minutes.

PSEC amended its guidelines to create the so-called zero-zero-and-2 policy in the monetary mandate framework. Can the minister tell us when cabinet approved that policy?

Hon. P. Ramsey: In the fall of 1997.

C. Clark: And I assume it went to Treasury Board before cabinet approved it. Is that correct?

Hon. P. Ramsey: Yes, it did.

C. Clark: What about the accord process? When was that approved by cabinet and by Treasury Board?

Hon. P. Ramsey: The general framework was approved in the fall of 1997. As negotiating strategy evolved in 1998, the process for accords also . . . . It was at that time that we were looking at an accord process to supplement the work that was going on in the zero-zero-and-2 mandate.

C. Clark: I want to be clear. Was the accord process approved by cabinet and by Treasury Board before it was advanced?

Hon. P. Ramsey: As individual elements of accords were proposed, they were vetted through Treasury Board.

C. Clark: My question was about the process for negotiating the accords. There were two processes going on. One was to negotiate the so-called zero-zero-and-2 collective agreement monetary framework that the government set up, and the other process, which was clearly a whole process that the government sent a whole bunch of guidelines out about, was the accord process.

My question: if the government approved the process for zero-zero-and-2 and all those guidelines, when did the government and cabinet and Treasury Board approve the process -- not the individual accords but the process for negotiating those accords?

Hon. P. Ramsey: The member does describe that there were a variety of terms of reference for accords and expectations of them. Those terms of reference did go through a formal approval process by cabinet. I must say that staff do not have the information as to whether it was the fall of '97 or early '98. I regret to tell the member that I can't out of my own memory come up with the month or the quarter in which it occurred. I do know that as negotiations proceeded in the spring of 1998, those terms of reference for accords were well understood and acknowledged by people who were doing work for the government.

[1545]

C. Clark: Not only was the accord process approved by Treasury Board and by cabinet, but the minister has already indicated that the individual accords were also viewed by Treasury Board and by cabinet as they came forward. Can the minister confirm that for me?

Hon. P. Ramsey: No, I didn't say that. What I did say was that the offers of individual accords were vetted by Treasury Board, so there was a clear understanding of the cost implications of them.

C. Clark: So Treasury Board knew what was in the accords, cabinet knew what was in the accords, and everybody knew that they were being negotiated. They were going through them bit by bit so that they knew the exact cost. But the Premier says he didn't know what was in the accords. He said he never knew what the costs were going to be.

How is it possible that the Premier could have remained uninformed when he was Attorney General, when he was on the Treasury Board? When this Finance minister was on Treasury Board, how is it possible that he could have remained in the dark, completely ignorant of what was going on in the accord process -- how much it was costing -- when in fact this minister and that Premier were sitting at the Treasury Board table vetting those accords on a cost-by-cost basis?

Hon. P. Ramsey: I'm sure we'll have a good debate. I'm very pleased, actually, with the work that Treasury Board did earlier this year. It released in April the rollup of all accord costs and all negotiation costs for the last three years. It reveals fully what was negotiated and where. Just for the record, so we can get it on the record straight and understand what the heck we're talking about, here is the record. The total ongoing funding-base lift within the zero-zero-and-2 time frame, in what's usually considered direct wages, amounts to some $494 million over the three years of the accord. Of that amount, approximately $220 million, or 44 percent, is for low-wage redress and pay equity.

At the time when the zero-zero-and-2 was announced, it was also very explicitly said that we intended to give workers who are low-paid or subject to pay equity more money than the zero-zero-and-2. The other costs were service enhancements for around $270 million, for base-funding adjustments totalling $674 million over the three-year period.

G. Hogg: I seek leave to make an introduction.

Leave granted.

G. Hogg: We are joined in the gallery today by 49 students from White Rock Elementary School, my alma mater as an elementary school. They are French students in grade 6. They are accompanied by their parents and teacher Mr. Dean Hollett and Ms. Marie-Madelaine Viredaz. I would ask the House to please make them most welcome.

[ Page 16672 ]

C. Clark: Not only did the minister know about the cost of the accords as they were coming through Treasury Board, not only did the Premier know about it . . . . Or we assume; the Premier says he didn't know about it. Not only did this minister know about it, but he also knew about all the costs that were going into labour adjustment, for example. There was a labour adjustment subcommittee of PSEC that the minister was on that vetted all the labour adjustment costs that were going to be going into the accords. So he must have known about those costs.

Why is it, then, if he knew about those costs and he knew as far back as 1998 what was going on, that he didn't inform the Premier?

[1550]

Hon. P. Ramsey: We said when we released the report on April 6 that while we had the general guidelines in place, the total rollup on a fiscal-year basis of the individual accords had not been done until we undertook it in April.

The other thing I would say is that the member keeps pounding away at the parts of this that are "accord costs." When she looks at those, the actual amount of this money that goes to "accords" is very, very small. We have money here for service enhancements that I think is significant, and I know . . . . I'm not sure that they want the money to hire more teachers in the public schools, but that's what that money is for. I'm not sure they want the enhancements in the contracts that specify we need to get 1,000 more nurses into B.C.'s hospitals, but that's what that money is for.

I'm a little puzzled, because I did hear the critic for Women's Equality, in earlier debate in this chamber, actually agree with the priority that we'd placed on low-wage redress and pay equity, and that is a significant part of the money here that, in the opposition's views, is "outside the guidelines" and somehow therefore a nefarious deal. We think it was the right thing to do.

So we have rolled up all the things. We have said very clearly that we intend to have this as a standard for release of information around public sector negotiations, both contracts and fiscal-year impacts. I think the work done by Treasury Board staff in April in doing this rollup for three years was valuable for all of us -- to take a hard look at what had been achieved and at what costs -- and it will continue in the future.

C. Clark: I'll just start by noting that the money that's going for service enhancements as a result of these contract settlements and these accords is going to be less than a quarter. It's going to be 21 cents of every new taxpayer's dollar going into service enhancements as a result of these negotiations. So when the minister gets up and talks about nurses and teachers and all the great benefits that taxpayers are getting out of this, he's wrong -- he's absolutely wrong. When it's less than a quarter from every dollar that's getting out there, that's not very good value for the taxpayer's dollar.

The second point I want to make is this: if the government is going to use this as the standard for disclosing information about what's going on with public sector contracts, British Columbians have a long way to go before they're enlightened about what this government's doing. The information that the government has provided is terrible. It's not anywhere near the standard that we need.

What the government could have done is provide the information that PSEC was supposed to be collecting, which is a contract-by-contract costing. Even the PSEC web site, the PSEC public information, says very clearly that they were going to be costing-out each of these contracts, they were going to be relying on the employer groups to supply that information, they were going to be checking it out, they were going to be getting back and forth, and they were going to be going on with an ongoing cost for those contracts. So why didn't the government release that information in a form where we could understand how much each of those contracts cost as opposed to what it cost each ministry?

Hon. P. Ramsey: Collective agreements are reported to the Labour Relations Board -- filed with them. They're public documents. Anybody can go and obtain a copy of a collective agreement. If you want to cost a collective agreement, it's there for you to look at and cost. This is not exactly rocket science.

The Business Council of British Columbia costs collective agreements, both private sector and public sector, all the time and publishes its results. This is not any dark mystery, contrary to what the opposition seems to believe. So I am slightly puzzled by that sort of approach to it.

What we have done here in this document is said: "Right. Instead of having individual ministries and employer associations deal with the totality of what the financial impacts are year by year, we want to do a rollup of it all and release it." That's what we've done.

Let me correct the record. The member is simply wrong when she talks about service enhancements and their impact here. Here are the figures: the total impact, ongoing commitments here, in the zero-zero-and-2 negotiations -- what was negotiated in those three years that has impacted on base-funding adjustments -- is $764 million. Of that amount, $269 million is for service enhancements.

That amounts to 35 percent -- over a third -- of the remaining $494 million. Now, $219.48 million is for low-wage redress and pay equity. If she wants to say that's not important, fine. Go ahead. I think it's an important symbol, and I'm very proud, actually. As I said when I released this information, not only have we talked about pay equity in the broad public sector, we have almost completed achieving the goals for pay equity that PSEC set for itself when it was established some seven years ago. As for direct pay raises, there is around $275 million for direct pay wages in that.

That's $764 million in adjustments to base funding for broad public sector wages as a result of agreements, accords and others in negotiations in the zero-zero-and-2 time frame. That's what the document says. I'm very proud of the work it does in rolling it out and revealing it. I don't think these things should be behind closed doors. I think we need to have on the record both what the costs are and what we got for it. Now, if that $270 million is something the opposition wishes to say is not valuable, let them. I believe it is.

[1555]

C. Clark: Let's talk about service enhancements, because this government has been out there telling British Columbians for five years that they're going to spend hundreds of millions of dollars in protecting health care and education -- just pumping money into the system. And they've been leading

[ Page 16673 ]

the public to believe, very clearly, that that's going to mean lots more teachers, lots more doctors, lots more nurses, lots more services. What it really means is more expensive services.

It doesn't mean that people are going to get more service; it just means that it's going to cost more money for every service that they get. If that's not intentionally trying to lead the public down a road that doesn't fit with the truth, I don't know what is. When you're only taking 25 or 21 cents on every dollar and pumping it into service enhancements and the rest of it is actually going into making your current services more expensive, that is not meeting the government's promise.

I want to get back to this question of accounting, because the minister stands up and says: "Oh well why don't you just account it? All those documents are public. Why don't you just go and add them up and see what it is?" If it's so easy to figure out what those documents cost, what all those accords cost and what all those collective agreements cost, why was it such a shock to the Premier to find out the day he became Premier -- after he had been sitting in cabinet, had been privy to all the documents, had been at Treasury Board, had seen all these approvals come forward . . . ?

He'd had them costed out for him. He'd seen the briefing notes. He'd presumably had access to personal briefings from the Minister of Finance, and he still couldn't figure it out.

Hon. P. Ramsey: I'm not quite sure what the question was in here. Look, I guess the assertion is that there's nothing in this $764 million of admitted changes to base funding as a result of contracts and accords negotiated in the zero-zero-and-2 time period, from 1998 through the spring of 2001. There's nothing in there of value. The $220 million spent on low-wage redress and pay equity is simply not valuable. We shouldn't do that? We shouldn't invest money in that? If that's the assertion, that's fine. Your critic for Women's Equality doesn't seem to think so. But if you don't think that's a valuable investment of public funds, then stand up and say so.

Within the Ministry of Health, I would point out that the incremental lift to the Ministry of Health was some . . . . Oh man, it looks like . . . . Well, it's hundreds of millions. But if you don't think that the increase to the doctors salary package was important, stand up and say so. It's $100 million a year, this year and next year, to make sure. And only 2 percent of that amount, incidentally, is for an actual fee lift, which takes place this fall -- only 2 percent.

The other part of that $200 million investment is for additional services. The fee adjustment, hon. opposition critic, is a 2 percent adjustment to fees for physicians in, if memory serves, September 2000. That's the only part of the agreement with the BCMA that involves an actual increase to fees. The other one is to make sure that we have the volume in place so that we can avoid RAD days, so that we can avoid shutdowns, so that we can make sure the BCMA is committed to making sure that services are delivered to British Columbia. Maybe she doesn't consider that valuable; I do.

[1600]

We've debated repeatedly in this chamber whether the $150 million investment in new teachers to lower class size, restore teacher-librarians and make sure that specialists are available in our schools is important. We on this side of the House think it is. That's a service enhancement that I would support; maybe the opposition doesn't. They voted against the lower class sizes; maybe they oppose this as well. But the figures are there: $220 for low-wage redress, $269 million for service enhancements, $275 million for direct lifts to scale. That's the result of the three-year negotiating period.

C. Clark: Well, you know what I think is valuable and what I think most British Columbians would think is valuable? A government that's honest with them about what it's actually spending their money on, a government that's honest with them and doesn't say, "Oh, we've got a zero-zero-and-2 guideline for public sector settlements, and that's all it's going to cost you, folks; don't worry; trust us," when in fact it cost $1.3 billion in new money.

If the government decides that it wants to go out and take the vast majority of the increases to its health care budget and spend it on existing services instead of adding new services, and they think that's what's going to make the public happy, well, then tell the public. Don't mislead the public into thinking that there's going to be more beds open in hospitals as a result of the increase, or that there's going to be more new top-notch machinery that they're going to have available in their hospital, or that waiting lists are going to shrink in their hospital as a result of the increases.

The vast majority of the increases that this government has brought out for the public sector has gone to enrich existing services -- not for new services, not to shrink waiting lists, not to build schools, not to add teachers. That's not where the vast majority of it has gone -- 21 cents on every dollar has gone to that.

A good investment would be in a government that was honest about that with people. If that's your platform, fine; run on it. Be honest about it, but don't hide behind it. And don't use the veil of this document, which is difficult at best to try and boil down, to try and make it seem as though you've got some kind of a transparent process.

Because if this is the kind of accounting that this government's going to provide for future public sector settlements, like the CUPE settlement that they've already concluded, then that doesn't go anywhere near living up to the Premier's commitment to be a transparent, honest, understandable government. If the government has the numbers, has done the costing for all of these agreements, will the minister stand today and commit to release those within the next couple of weeks so that we can all see?

If it's all publicly available and anybody can figure it out anyway, let's at least make sure that he can provide it to the public, and we can make sure that the Premier sees a copy so that he knows what every one of those agreements actually costs.

[T. Nebbeling in the chair.]

Hon. P. Ramsey: Well, a lot of heat there -- I'm not sure about the light.

Six million dollars of the amount we're debating today went to an agreement between the Ministry of Health and the BCMA for rural health services in small communities. Given some of the difficulties we're having in my home riding, I think that's a valuable investment. It was done through this sort of a process.

I believe that most British Columbians support the idea of smaller class sizes in schools. I believe they support hiring more nurses and see this as improvements to services and

[ Page 16674 ]

enhanced services in their communities. The Premier made a commitment to open the books on zero-zero-and-2 on everything from the costs of provincial court judges to home care workers, and we've done exactly that. The facts are here. The members opposite want to put their

interpretation on it. I think the facts speak for themselves as far as what the costs were for every part of negotiations during the last three years. We intend to keep releasing those costs.

G. Farrell-Collins: I think the issue that's before us is a lot simpler than the minister makes it out to be. Here's how the public perceives it. I notice in the performance plans for the Ministry of Finance that one of the goals of the Ministry of Finance is to think like a taxpayer. That's one of the strategic aims of how they want to deport themselves: to think like a taxpayer. So let me try and think like a taxpayer for a minute, if I may.

[1605]

The taxpayer out there has been seeing repeated cost overruns in government, failure to hit deficit targets and inability to hit any of the targets of the debt management plan year after year after year. They see their taxes going up, and so they look out there, and they say: "Well, what's going on here? Why is it that the government can't hit its balanced-budget targets? Why is it that year after year they never manage to hit those deficit targets?"

The taxpayer is sitting at home . . . . They don't go to the Labour Relations Board and pull out the collective agreements and analyze them. But this is what they're faced with. They wonder why it is that the government can never seem to balance its budget. So questions are asked of the government: "You're spending too much on public service," or "You're not hitting your targets. Why is that?" And the Premier, the former Premier, various ministers of government and virtually every single backbencher has sat up and said: "Hey, we're keeping a lid on government expenditures. We have a zero-zero-and-2 arrangement.

Our collective agreements have been held to zero-zero-and-2. And the money we're putting into health care and education and protection of children, etc., is new money. It's going in there. Look at how much money we've put into health care."

People at home in Prince George are sitting there saying: "The government isn't balancing its budget, but they tell us they've been keeping the line on wage rates and they've been putting this new money into health care, so they're probably doing the best they can." That's how the taxpayer perceives it.

So later, when not just the taxpayers but apparently the Premier -- moving into the Premier's Office -- find out that in fact all of the money that's been going into health care and education hasn't been going to reducing class sizes or reducing waiting lists or giving better health care service or improving doctors' services . . . . That big chunk of that money -- two-thirds, three-quarters, depending on how you calculate it . . . . In some cases, it's almost 80 percent, depending on what you include in that figure, whether it's $700 million and some or $1.1 billion.

The reality is that the money, the total bill, that's been going into those public services, hasn't -- unlike how the government has gone out of its way to characterize it -- been going into new services to deal with wait-lists, to deal with class sizes, to deal with new nurses in the hospitals.

That's the way it was presented to the public: all that new money was going to new services. The issue that the public has with the government . . . . The whole reason behind the government doing this disclosure process was to get it out there on the table. This is part of the coming clean, the confession of the NDP at the end of their mandate, as they lie there and receive their last rites. This has been part of that disclosure. So the public looks at that and says: "Well, now I know why health care hasn't been getting better. Now I know why we still have a problem in Prince George.

Now I know why the school system isn't the way I would expect it to be. Despite the assurances that the government was sticking to zero-zero-and-2 and was putting all this new money into education and health care, we can now see that it wasn't going to new services."

That's the problem that the taxpayer has with the way the government has presented this information over the last number of years. And I would hazard a guess that if they weren't thinking that way -- if they all understood where all the money was going, if the government was making a point of telling them that -- there would have been no need for this huge coming-clean disclosure process and the request for absolution that resulted from this collection of data. I think that's what the issue is.

So the minister can stand today and say, "Well, the opposition don't want more money for health care; they don't want more nurses; they don't want lower class sizes," and he's missing the entire point. To me that says that despite this absolution process -- or this request for absolution, this disclosure process -- the minister still doesn't get what the taxpayers are thinking. And he says he's going to think like a taxpayer. Well he'd better start thinking like a taxpayer, because the taxpayers think they've been misled over the last number of years.

That's the point that's being made here today. I think the minister should accept that and understand that's what it is. I think that the actions of the government over the last number of years indicate that perhaps some of them in government -- if not the minister, some people -- may be starting to get that.

C. Clark: This is a yes or no answer. Will the minister table for us the costs of each collective agreement that's been signed as a result of this PSEC process by agreement -- not across government, not across ministries, but the cost by agreement? If they have that information, why won't they table it?

[1610]

Hon. P. Ramsey: Staff undertook to do that sort of detailed breakdown in the document that, I think -- maybe the member doesn't have it before her -- had an April 6 release. If you turn to the back of it -- for example, flip to the Ministry for Children and Families -- it isolates compensation increases due to specific agreements, whether it's nurses levelling funds, health sector-related increases or low-wage redress and pay equity, and for which year -- previous commitments from agreements signed before the zero-zero-and-2 years of '98-2001.

The information is broken down in a great amount of detail, down to the level of some things that, frankly, I hadn't been that aware of. For example, I must confess that I wasn't aware of the impact of the judicial compensation increase when this House dealt with it, I believe, back in '99 of some $4 million, I guess it was, in '99 and another $1 million in 2000-2001. Everything has been broken out here in a level of

[ Page 16675 ]

detail that, I think, does allow . . . . It surely allowed members of the press to take a hard look at what had been committed to and for what objects, right across the broad public sector.

We made a commitment to open the books. We have done so. Government is a people business. So as we have public sector workers right across, a large proportion of the provincial budget that we have debated and are debating in estimates does concern pay and benefits. And obviously the expansion of services through hiring more nurses or teachers involves payment of salary and benefits.

C. Clark: All right. I'll take that as a no.

My next question, though, is really about the parameters that were set on this, because $1.3 billion is nowhere within zero-zero-and-2, which is what the public was led to believe these agreements were going to cost. It ended up costing us $1.3 billion. What parameters were set in place to control the costs of the accords which added so much to the total cost of this so-called zero-zero-and-2 negotiating framework?

The minister admitted in his press release of a couple of months ago, which he's just referred to, that the government knew that there were going to be added costs as a result of the accords. So my question is: if they knew there were going to be added costs, where were the parameters and the guidelines to control those costs?

Hon. P. Ramsey: We have released a full list of all accords that were negotiated.

The other thing that I would say to the member is that contrary to what seems to be the belief of the members opposite, accord costs in these three years are not the major component of what she wishes to look at. Accord costs amounted to some $5 million in '98-99.

I look at this and say I understand the desire to hammer away on that. The great majority of costs that are contained in this agreement were for such things as, let me say it again, pay equity and low-wage redress, service enhancements, base salary costs. We agree with the member opposite that the sort of rollup and release of those needs to be done in a more systematic and orderly way. That's what we undertook to do in April, and that's what we've undertaken to do for subsequent collective agreements.

[1615]

C. Clark: So the government had no parameters or guidelines to control the costs of the accords, I have to assume, because the minister sort of dodges the question and refuses to answer. The government did have a guideline in place for zero-zero-and-2, but we know that the total compensation costs add up to $1.3 billion. Where did the process get off the rails? And why weren't there any guidelines for that portion of the process that wasn't covered either by the accords or by zero-zero-and-2?

Hon. P. Ramsey: Let me say it again. The member keeps referencing this larger figure. Ongoing base funding costs as a result of the contracts and accords negotiated for the '99-2000 period, the ongoing lift, the component of the budget that goes to public sector wages, was $764 million. This year, in the year 2000 budget, the lift was $509 million. We have a budget increase of around $1.2 billion this year. Of the $764 million break it down yet again: around $219 million for pay equity and low-wage redress, $275 million for base salary adjustments, $270 million for service enhancements -- and we've discussed what those include.

The member can say as many times as she wishes that she wants to include adjustments to base from previous years -- and that's fair; we revealed that as well. But they were not part of the negotiations during the '99-2001 period; they were from the negotiations that concluded in prior years. What we have done is said, "Hmm, there are some things in that period that affect the ongoing wage bill even though they're not the subject of negotiations in those years," and we have reported those as well. We've also reported one-time costs which don't have an ongoing impact, some of which were part of accord discussions.

So we've tried to be -- as the Premier said -- as open as we possibly can, by opening the books on what happened during that period, what the effect of contracts negotiated prior to that period was and what the results have been. There's page after page of detail as far as what was achieved and what the costs were.

C. Clark: Some of the costs that are included are future costs, and I assume the government must know what that's going to be. Jo Surich did a report for the government on the CSSEA contract, the community social services contract. He estimated that that would cost about $860 million by the middle of the decade.

Can the minister tell us when he's going to table this full and frank disclosure of all the future costs of the contracts that have been signed so far, past the budget year provided in this rather thin document that they provided for us two months ago?

Hon. P. Ramsey: A thin document. I count it as 16 pages of the detailed work plus a cover document of an additional five pages. I assure the member opposite that when we released this, those who were looking at it from the gallery and others who were examining it found it far from thin. There is indeed a lot of information in here.

We will obviously, as we move forward in developing the fiscal framework for budget 2001 and beyond, quantify costs of salary and other pressures as we move forward in the planning for that budget. You know, the Premier said that we're going to open the books on zero-zero-and-2, and we have done so. As we get new agreements -- the member referenced earlier the CUPE agreements -- we will be releasing the information on those cost impacts in the same format as we've done in April, so that everybody can see what has been negotiated and what the costs are.

[1620]

C. Clark: The question was: when is the government going to release the cost of the contracts that have been signed so far, past budget year 2001? There are big implications in many of those contracts for 2002, 2003, 2004. The ministry must know what those costs are; they must have quantified them already. I have to assume, for goodness' sake, that they know what they are. If they do know what they are, when is the minister going to table those?

Hon. P. Ramsey: As we did with budget documents this year, where we've released very clearly what the wage

[ Page 16676 ]

impacts were in the coming year, we intend to do that in future years. We've said in the budget documents exactly what components of changes in budget were due to wages right across the piece. We intend to be doing that in future years as well.

C. Clark: That's a pretty sneaky approach for a government that says it's committed to transparency and openness, for goodness' sake. The government should be providing the details of these contracts for the life of the contract. Those are the costs that they should quantify. If the contract is negotiated to include a wage lift in the year 2003, for example, the government must know what that number is. If the government knows what the number is, why won't the minister just share it with the public, for goodness' sake?

Hon. P. Ramsey: Man, oh man. I'm not sure that we can advance this debate a whole lot further.

We have said very clearly that collective agreements are part of the public record, and they are. We have sought to do a rollup of costs for the last three years and projected forward to the end of March 2001, and we've done that. We've said that as further collective agreements are negotiated, we'll reveal, in the same format, the cost of those. We've said that as we do a fiscal framework and move forward, we will definitely quantify the costs, and we've done it, by ministry, in the last budget. We'll continue to do it so that taxpayers know what compensation increases are.

There's a lot of information out there. I think the public understands fully what part of their tax bill is going to wages and what

part is going to other objects of expenditure. We'll continue to work hard to make sure that the public has as comprehensive information as we can provide.

C. Clark: I'll take that as another no from a minister, a member of the government that, despite the fact that they say they're committed to transparency, are still committed to being sneaky and pulling accounting tricks out of a hat when they have the numbers and are just refusing to disclose them to the public. It's the public's money; the public should know where it's being spent. For the minister to just sit on the information when he has it demonstrates again that this government has no commitment to changing, to being honest and open with the public, which doesn't bode well for the future . . . .

This government is now embarking on its next round of negotiations, and I'm curious . . . . Okay, maybe the government doesn't want to share the information with the public about where their money is going. I suppose they'll pay the price for that at the polls, but it's their choice to do it.

My question, though, is: what is the government doing to prepare for these negotiations that are coming up? Last time they embarked on negotiations, it was in June that they announced that they had guidelines for negotiations, that they had a mandate. That was when they came out with their phony zero-zero-and-2 guidelines; that was in June. And this government doesn't even seem to have any kind of negotiating strategy in place at all. When is the government going to be prepared to have its negotiating strategy in place? Or is it just simply going to wait and hope that these collective agreements don't finally get negotiated before we come into an election?

[1625]

Hon. P. Ramsey: PSEC had a meeting this morning. All employers councils were represented. Mr. Moser, as the CEO of PSEC, was there to begin the task of working with employers organizations and with members of government as we work forward to produce mandate, process and structure for bargaining for the next round in the broad public service. That's the work that will be undertaken. We expect to have those recommendations on process and structure in place by the fall for consideration of employers council and government.

I'm undertaking that work as chair of PSEC, and I think we will have a good structure in place. Mr. Moser brings a wealth of experience to his role as the senior staffer involved in this. We will be getting those mandates in place.

I'm not going to respond to the rest of the member's speech. I must say that one of the things the opposition critic and I discussed earlier is the one thing that has not happened in this session of the Legislature: reform of the estimates process. Frankly, the sort of debate we've had the last little while demonstrates, again, the need for that sort of reform. I wish we had been able to move forward. I think the late Fred Gingell had some excellent ideas about how we do that. We haven't been able to. It surely wouldn't be the sort of debate that we're engaging in now.

C. Clark: I'm all in favour of reforming the way this House operates. One of the big reforms that we might have is maybe getting a government that would be prepared to answer questions instead of just dodging them or intentionally giving an answer that's intended to mislead people. I mean, for goodness' sake, government has the numbers for these contracts, and they just simply refuse to release them.

My question, though, was about the negotiating mandate. It was not about the process and the structure that the government is setting up. My question is: when will the government have its negotiating mandate in place, and when will it be prepared to make that public?

My concern is that we are already in June. Those agreements are going to be expiring in March of next year. The last time the government embarked on this process, we knew in June what the guidelines were. Granted, the guidelines were phony, but we knew what they were. By waiting I can't see that the government is going to be in any position to be ready to negotiate with the public sector unions. So when is the negotiating mandate going to be ready?

Or is it simply a matter of the fact that the government is going to stall on these negotiations as long as they can, so that they can avoid settling any of these agreements and the embarrassing costs that might be attached to them before they get to an election?

The Chair: Minister, I would like to make an introduction. We have the honour and the pleasure of visitors from Emerald Park Elementary School in Kent, Washington. They are accompanied by their teacher, Ms. Keyes. I would like to ask the House to make them all very welcome.

Hon. P. Ramsey: At the PSEC meeting this morning the consensus was that work on mandate, process and structure should commence at once and be in place by the fall. The expectation, as I understand it, at both employers associations and public sector unions is that negotiations begin early in 2001. That's the sort of time frame that we're working on. I must say that I find it . . . . That is the time line that we will be working on to prepare for the next round of public sector negotiations.

[ Page 16677 ]

G. Farrell-Collins: I'd like to move on to the Superannuation Commission now, if we can. While we're waiting for staff to come, I have a question to the minister. It is not on either of those topics, but I think he should be able to answer for me fairly quickly while we're waiting for staff to come in. It was raised earlier in the session.

It's the issue of letters being written by a number of consecutive Ministers of Finance to the B.C. Ferry Corporation to guarantee their debt and give assurances that they would be there to backstop the Ferry Corporation, because they were essentially insolvent, and to avoid reservations being placed on their financial statements. Can the minister tell me for how many fiscal years that was done?

[1630]

Hon. P. Ramsey: The consensus seems to be two years.

G. Farrell-Collins: I'm sorry; I didn't mean to ambush the minister with it. I just thought we'd take a moment to do it. I thought it might be an easy thing.

Can the minister tell me if there have been any other Crown corporations or agencies who've had similar letters written for them by the Ministry of Finance over the last number of years?

Hon. P. Ramsey: Staff have no recollection of any others. We can go back and check. This was precipitated, as I think the correspondence shows, by an auditor's request on examination of the books on B.C. Ferries. We'll get back to you if we find any others.

G. Farrell-Collins: I look forward to receiving that information as soon as the minister can make that determination. I assume it won't take too long to find that out. A couple of days or a week or whatever is fine with me; I don't need it today. That's fine. I would like to know how many times and also, if there were any others, what they were. What were the particulars around them, if there were other instances of that being required?

I wanted to move on to the Superannuation Commission. I thank the minister's staff and officials for providing a briefing on this issue earlier, but I wanted to get some of the issue on the record and hear from the minister himself.

My understanding is that somewhere in 1996 or so the Superannuation Commission embarked upon a plan to upgrade its systems to make them, I assume, more technologically advanced, more responsive, and to improve the quality of service to pensioners, etc. My understanding, as well, is that to date that project is still not up and running 100 percent. My understanding is that it's getting close, but there have been some substantial difficulties over the years in getting this system up and running properly.

The minister perhaps can give us an idea of what the opening budget or the anticipated cost of this system was initially, where it is now and when the minister expects it to finally be up and running properly.

Hon. P. Ramsey: One thing I need to correct the member opposite on: there is no Superannuation Commission. There is in place the Pension Corporation, which came into full operation as of April 1, 2000. We're joined in the chamber by Louise Young, who's vice-president of information management, finance and administration in the Pension Corporation. As we've debated in this chamber, there has been a real attempt to bring pension administration for public sector pensions into a more modern configuration, with those who benefit from pensions participating more, possibly on boards and the board of the Pension Corporation. We have made some significant strides.

One area that was worked on, as the member says, starting in '96 was indeed a new information management system. The initial cost of that contract was projected to be $17.3 million. In '97, I believe it was found that that was regrettably not going to do everything that was required. The budget was revised to $23.3 million; that will take it into full completion.

[1635]

The new system was, I would say, fully operational in the fall of 1999, though the corporation has done a number of new releases. Usually you've got around a six-month shakeout before you're sure that everything is going as smoothly as possible. The last of those releases is anticipated to be next month, July of 2000. That will mark the end of the implementation process of the new system.

G. Farrell-Collins: That's about a 34 percent increase in the budget costs in a fairly short period of time. That's a fairly significant cost overrun for a project; $17.3 million to $23.3 million is about 34-something percent. It's a fairly significant cost overrun for a project of any kind. Although I understand that systems sometimes have a way of doing that, it's still a fairly significant cost overrun.

I know that some of the problems experienced were backlogs and people getting some sort of an idea of what their pension benefits would be upon retirement, as well as proper disbursements, proper pension adjustment numbers, etc. So those are not insignificant inconveniences for people.

I don't want to ride the government too hard on it. I know that writing new software for the systems is a difficult and tricky prospect. Can the minister tell us what portion of that is hardware and how much of that is software? Does that $23.3 million include staff time?

Hon. P. Ramsey: The member is quite right: this was a significantly more expensive project than was originally anticipated back in 1996. There was a vendor change in the middle of it in '97 -- really, a rescoping and retrofitting of the project and shifting to the product of the new vendor. So this was an implementation that was surely not as smooth as one would have liked.

As far as the breakdown of costs, we don't have the exact figures. We can get them for you. The guess is that roughly around 25 percent to a third would be hardware. The remainder would be software and staff time to get it underway.

The member is quite right -- I assume this is what gave rise to his wanting to raise the issue in debates -- that as we worked through this and the shift over to the new system, there have been some real delays in service and some real problems. I imagine that he has received correspondence from public pension plan members, as I have, concerned about delays in getting figures on the value of their pension or what pension benefits they could receive upon retirement, or figures related to purchase of past service. There have been some delays in the Pension Corporation as this new system has been developed and now put into place.

[ Page 16678 ]

[1640]

G. Farrell-Collins: Can the minister tell me whether or not the new entity . . . ? I have trouble with the new names; I sort of stick with the old -- like I have trouble with the idea that there's a new government. I still sort of stick with the old.

Perhaps the minister can tell me whether or not there has been a performance plan done for the new entity that would indicate some of those measures for targets on how to deal with backlog, some time frames for how long members should have to wait for information, etc. Is there something? Has something been put together like that to give us an idea of where the goals are?

Hon. P. Ramsey: The expectation is that the Pension Corporation will have a performance plan for subsequent fiscal years; it did not for this one. It only came into formal existence as of April 1. Their big challenge has been the transition. They're working hard with their board right now on what measures the board expects of them. I would say this is one of the interesting things about the new corporation.

They now have accountability not only to the Minister of Finance because they're a Crown corporation that the minister's responsible for, but they will have direct accountability to a board of directors that represents pension plan members. So there's a new structure of accountability being established as this corporation moves forward.

I would only say this: there is a . . . . You know, I think the member has referenced, and I have, one of the concerns that I know the corporation is dealing with and that the board is most concerned about, because the board represents the plan members. They are quite concerned about delays in the timely responses that you request of the kind we've discussed.

G. Farrell-Collins: I would appreciate receiving a copy of whatever performance measures the corporation comes up with as targets, because I think that would be helpful to know and to monitor over time as well. The minister is right: I have received correspondence and phone calls from people relying on the corporation, people working in the corporation, who have been worried about this and aren't really comfortable with how this has all come together.

It is a significant amount of money; $23 million still is a lot of money. I am concerned about that. It's a lot of money to pay for a system. I know it's a complex system. I know it has significant, varied demands on it, but that's still an awful lot of money. To me, this looks like a capital project. A system, whether it's software or hardware . . . . It's a project of $23.3 million; it's pretty significant.

I'm wondering if the minister has any thoughts on how this program might have benefited from the new capital management provisions that are being put into place by legislation and, more generally, what we've learned from this exercise. It was an expensive exercise. We hope that the system works properly when it's finally up and running. It was a significant investment, and I'm hoping that we learned something for our extra $6 million.

[1645]

Hon. P. Ramsey: One of the things that the corporation will be undertaking once the final version of the system has been released is to do a post-implementation review to see what lessons we can learn from this. I'd be pleased to provide the member with a copy of that when it's completed.

In my experience in my time in government, I must say that among the most difficult projects to accurately cost and scope on the monitor seems to be the development of new systems software. Some that I've been involved in have gone smoothly. Others have had problems that kick them off track halfway through. Either the technology changes or vendors change, or whatever.

One of the things that I know we've been seeking to do, of course, with the development of ISTA is to have a central agency in government that can be the source of expertise as we move forward in those sorts of system developments and, as much as possible then, to take risks in such projects -- and there clearly are -- as much as possible shifting it to the vendors that we're contracting with, rather than in government.

Is this always possible? No. Occasionally you find that something does go awry, as it clearly did in this case. I think we're on track. I think we will have a smoothly operated system. There are backlogs. The corporation will be hiring additional staff to clear those backlogs and make sure the system achieves the prompt response that pension plan members have a right to expect.

I. Chong: I just have some very brief questions, following along the line of the old Superannuation Commission. Last year when I debated with the minister, we discussed the changeover to the Pension Corporation, to the investment corporation.

At that time it was also in conjunction with the joint trustee agreements that are being developed. As I understand it, the college pension fund has proceeded with that. I think the teachers pension fund did vote on it at their AGM. I don't believe the public service has. I think the municipal pension fund has still not proceeded. I just would like the minister to provide us with an update as to where we are with the joint trusteeship.

In addition, I'll put all these questions on, so maybe he could answer them all at once and save time. With the public service pension plan there have been some concerns with the retirees still, which I indicated to the minister last year. They do feel that their voice is not being heard. There are a substantial numbers of retirees. They have an organization. They feel that they should have a voice at the table. If there is any way that the minister will reopen that discussion and look at that, I would implore him to do so.

Many of our public servants are going to be retirees. We've been celebrating Public Service Week. In addition to that, we should be looking forward to protecting their interests, so that they know that they have some control over their pensions. I would ask the minister to also comment on that.

[1650]

Hon. P. Ramsey: First of all, on the issue of joint trusteeship, as the member knows, there has been an agreement ratified and concluded for the college plan. Negotiations have pretty much concluded and ratification is underway for joint trusteeship agreements both for the teachers plan and for the public service plan. So those negotiations have gone fairly well. Discussions are underway in the municipal plan. I don't know what the chances of concluding an agreement will be. So the new legislative framework that this chamber debated and approved plan members are taking advantage of now. Discussions have gone fairly well in the past six months.

As far as the voice of retirees on boards goes, it is an ongoing issue, and not only in the public service directly but

[ Page 16679 ]

for retired members of other plans, whether they're teachers, college instructors or municipal employees. The negotiations on joint trusteeship are looking at ways to address that.

I must say we've got, really, as I'm sure the member knows, three sorts of governing boards here. First you would have the joint trustees of the actual plan, then you have the board of the Pension Corporation, and then you have the investment corporation. So as negotiations go on, you try to make sure that all voices are heard. Can you get everybody around the table? Sometimes no. There aren't enough chairs, frankly.

So you've got to figure out what sort of agreements among plan members, active and retired, might be made in their selection of representatives for joint trusteeship, and that's the sort of work that has gone on through the negotiations. Once I have something concluded and ratified to report to the member, I'll be pleased to do so.

I. Chong: I appreciate the minister's effort to provide any conclusions or resolutions that are made. But I still submit that retirees do deserve a place on the board; they represent a substantial amount of those who belong to the pension funds. In addition, this is their major source of income for their retirement. They, rightly so, would like to have decision-making abilities on their investments and where their pension funds are headed.

I realize these are defined benefit plans; I acknowledge all the things that were discussed last year. But I still want to say for the record that if there's any movement the minister can make toward allowing that discussion to take place, that dialogue to happen, to allow the retirees to have a voice so that they are satisfied that their interests are taken care of, I think we owe that to them.

With that, I'll conclude my remarks on the Pension Corporation.

G. Farrell-Collins: The next area that we want to address is the . . .

Interjection.

G. Farrell-Collins: . . . consumer taxation branch, but my colleague from Kamloops has made me aware that he has a question on a different topic. Perhaps he can ask the minister and we can . . . . I don't know if he can answer it at this point or not, but he can certainly undertake it.

K. Krueger: Earlier the minister and I discussed a matter briefly. I know that it does touch on the Ministry of Municipal Affairs, but it's also a matter of taxation of small business and a change that has brought some hardship to a small business in my constituency, which is the radio station Broadcasting N.L.

The broadcasting industry had suffered a change whereby they were moved into the definition of telecommunications, which caused them to be treated as a utility even though they're not a utility. They're funded by advertising sales. They don't have user fees such as cablevision companies do. The consequence to them was that their broadcast towers had an increase in taxation of 335 percent.

This change was successfully appealed through B.C. Assessment. But B.C. Assessment has since advised the company that they're going to appeal that decision to the Assessment Appeal Board, all of which is a matter of grave concern to this local company. They simply have to take an increase of $18,000 in taxes, if it happens, off their bottom line. That causes them to have to consider cutting back on services which they essentially provide for free in rural communities around B.C. For example, in Clearwater they have a booster. They provide their programming in Clearwater, even though they derive very little advertising income from Clearwater.

[1655]

I have had good cooperation from Mr. Brian Walisser, the director of policy in Municipal Affairs. I wanted to seek the minister's assurance that he will be keeping a watching brief on this file, in that it does touch on his ministry, and trying to ensure that justice is done and this correction is made -- which I gather may well be made through regulatory changes and not necessitate any legislative changes. That's all I'm looking for from the minister: an indication that he will participate in trying to resolve this matter as expeditiously and fairly as possible.

[T. Stevenson in the chair.]

Hon. P. Ramsey: Welcome to the chair, hon. Chair.

I'm always interested in seeing justice being done, but I must say, the way this issue touches on my ministry is pretty tangential. This is thoroughly within the realm of B.C. Assessment. As the member said, he's been working with people in B.C. Assessment and in Municipal Affairs on this issue. That's where the issue about changes in the regulatory regime really lies, and I think that's the appropriate place for it to go. I know that the results of that are, of course, remission of taxes to the provincial government, but the actual change and the responsibility for the regulations around how B.C.

Assessment operates do not go through my office or through my ministry. So while I appreciate the member's interest and will obviously ensure that my colleague the Minister of Municipal Affairs, who's responsible for B.C. Assessment, is aware of it, it really is in that minister's and that authority's purview to deal with this issue.

G. Farrell-Collins: The issue I want to deal with today is one particular case that I know that the minister is familiar with, as is the deputy minister -- and I assume other officials are as well. It deals with the Countertop shop. The Countertop shop . . . . Say that three times quickly. I know the deputy minister is aware of it.

I'm sure other officials are as well, because I have correspondence from the deputy minister to the individual who owns the Countertop shop, a small business installing countertops and cupboards, etc., and correspondence between the gentleman who owns it and the deputy minister, which has been cc'd to me over time. I want to raise the issue because I think it's a worthwhile question to discuss.

This gentleman has been in business for I think about eight years. He worked for another countertop company previous to that. He self-assesses his PST. He has done so and remitted his taxes, my understanding is, on time, monthly -- the middle of the month, every month -- without fail for the time he has been in business. His number came up, and he was due for an audit. He was audited and was told that he had an assessment of some significant amount of money -- in the thousands of dollars -- because he had not been charging his customers PST on the waste that went into installing their countertops.

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For example, if one buys these lengths of preformed countertops in eight-foot lengths or larger and only needs six feet or 6 feet 3 inches -- as we know can happen when you're building things -- there's a chunk left over which is essentially useless. You can't do anything with it; you can't install it anywhere; you can't glue them all together. It's garbage. Unfortunate as that is, it's waste. This individual has to put that into recycling or in a dumpster and pay to have it hauled away. It's essentially a significant cost of doing business.

He bills his customers for the length of product that they use and assesses them the PST for that and remits that to the government. He has been told now that he needs to pay the PST and assess himself the PST on the entire eight-foot length, despite the fact that a chunk of that goes away as waste and is never used. The ministry has told him that the act says that any co