1988 Legislative Session: 2nd Session, 34th Parliament

HANSARD

The following electronic version is for informational

purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 3, 1988

Afternoon Sitting

[ Page

4219 ]

CONTENTS

Routine Proceedings

Fair Election Practices Act (Bill M203). Mr. G. Hanson

Introduction and first reading –– 4219

Oral Questions

Role of Craig Aspinall in Expo land sale. Mr. Williams –– 4219

Social housing on Expo lands project. Mr. Williams –– 4220

Ombudsman's recommendations. Mr. Cashore –– 4220

Provision of AZT to AIDS victims. Mr. Harcourt –– 4221

Taxation of charities. Mr. Sihota –– 4221

Ministerial Statement

Diamond Resources drilling on South Moresby Island. Ms. Smallwood responds –– 4222

Special Accounts Appropriation and Control Act (Bill 18). Committee stage.

(Hon. Mr. Couvelier) –– 4223

Mr. Stupich

Mr. Cashore

Mr. Williams

Ms. Edwards

Hon. Mr. Strachan

Provincial-Municipal Partnership (Taxation Measures) Amendment Act, 1988 (Bill 19).

Committee stage. (Hon. Mr. Couvelier) –– 4229

Mr. Stupich

Mr. Williams

Mr. Clark

Mr. Blencoe

Home Owner Grant Amendment Act, 1988 (Bill 2). Second reading.

(Hon. Mrs. Johnston)

Hon. Mrs. Johnston –– 4230

Mr. Blencoe –– 4230

Hon. Mrs. Johnston –– 4230

Committee of Supply: Ministry of Transportation and Highways estimates.

(Hon. Mr. Rogers)

On vote 67: minister's office –– 4230

Hon. Mr. Rogers

Privatization Benefits Fund Act (Bill 17). Committee stage. (Hon. Mr. Couvelier)

–– 4234

Mr. Clark

Mr. Lovick

Mrs. Boone

Budget Stabilization Fund Act (Bill 14). Committee stage. (Hon. Mr. Couvelier)

–– 4244

Mr. Stupich

Mr. Lovick

The House met at 2:07 p.m.

HON. S. HAGEN: It is my honour this afternoon to introduce

His Excellency Kossivi Osseyi, who is the Ambassador of Togo to Canada,

and accompanying him is Mr. Gary Tarrant, who is the honorary consul of

Togo in Alberta. Would the House please make them welcome.

MR. HARCOURT: Mr. Speaker, I too would like to express a

welcome to His Excellency the Ambassador for Togo, and to wish him a

good stay in British Columbia, and to let him know that one of the

projects of mutual support between Canada and a number of the countries

in Africa is around the growing urbanization problems. I know that the

Federation of Canadian Municipalities, the Canadian government and some

members of the B.C. government are very interested in helping and

enlarging the friendship between your country and our country. So,

welcome.

HON. MR. REID: Mr. Speaker, we would certainly also would like to add our welcome to the Ambassador on behalf of the Ministry of Tourism.

In the same audience is my deputy minister, Grayden Hayward, who has

with him Mr. Tom McCall, who represents Kamloops, the hub of tourism

for the province of British Columbia. Would the House make these two

gentlemen welcome.

MR. CASHORE: In the gallery today is Mr. David Lane, who is

the coordinator of the Tenants' Rights Coalition. Mr. Lane met with the

Minister of Labour this morning and had a very good meeting with regard

to some of the issues they are mutually concerned about –– I ask the

House to join me in welcoming David Lane.

MR. G. HANSON: In the gallery today is one of the

constituents of the second member (Mr. Blencoe) and myself, Andrew

Gage. He's a Fairfield resident. He's a Cedar Hill Junior Secondary

School student, and he's here this afternoon as part of a career

education program. I wonder if the members would make him welcome.

MR. BLENCOE: As all members know, much of the success of an

MLA obviously is the constituency or community office we each operate

in our various ridings. Mr. Speaker, after the first member (Mr. G.

Hanson) and I entertained our volunteers and staff in the Ned DeBeck,

some of our volunteers are present in the galleries today. Would the

House please welcome Veronica McDonald and Beth Loring from our

community office in Victoria.

MR. BARNES: I'd like the House to join me in welcoming a

member of the University of Victoria NDP club, Mr. Mike Geoghegan, who

is seated in the gallery. He and I had a very productive discussion

this morning on the outreach program to bring more members to the party.

HON. MR. STRACHAN: Mr. Speaker, visiting us today is the past president

of the Certified General Accountants' Association, Fred Punko, from Prince

George. Would the House please give him a nice warm welcome.

MR. WILLIAMS: I'd like to recognize our former colleague from

Vancouver East, sitting on the floor of the chamber. He used to be

known as the dean of the House. He would appreciate being called a

"has-dean" today. Would everyone welcome him.

Introduction of Bills

FAIR ELECTION PRACTICES ACT

Mr. G. Hanson presented a bill intituled Fair Election Practices Act.

MR. G. HANSON: In keeping with standing orders, Mr. Speaker,

I'd like to outline the key features of this bill. The Fair Election

Practices Act establishes a permanent electoral commission for the

province of British Columbia. It provides a thorough enumeration after

the writ is dropped for each general election or by-election. Mr.

Speaker, I think it would serve us extremely well — in the upcoming

by-election in Boundary-Similkameen and a number of others in this

House — that all eligible citizens be enumerated by a full enumeration

drive after the writ is dropped.

This bill would also ensure increased efficiency in voter

registration by distributing voter registration cards through

government offices, such as motor vehicle branches and government

agents. This is currently done, but we propose expanding that.

This bill would also ensure disclosure of election contributions

over $100. It would provide the electoral commission with the authority

to set campaign spending limits. It would redress a current inequity:

that is, that 18-year-olds in the province of British Columbia soon

will be going to the polls to elect a national government for Canada,

yet they are denied the right to vote in the province of British

Columbia for a provincial government. This bill would redress that

inequity. It would ensure that all eligible citizens had the right to

vote in the area in which they reside and, of course, would reestablish

the right to register on the day of the election.

Bill M203 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.

HON. B.R. SMITH: I ask leave to make an introduction.

Leave granted.

HON. B.R. SMITH: If I had been here, I also would have

welcomed the former member for Vancouver East, who I see sitting there

in the gallery looking young and trim, with such a fabulous tennis

game, laughing at us all for doing other things.

I would like to introduce 24 students from Mount Douglas high school, who are here with their teacher, Ms. Spicer.

Oral Questions

ROLE OF CRAIG ASPINALL IN EXPO LAND SALE

MR. WILLIAMS: To the Minister of Economic Development.

Welcome back. The spokesperson for Mr. Li Kashing and his company in

British Columbia is Mr. Craig

[ Page 4220 ]

Aspinall. Would the minister confirm that Mr. Aspinall was formerly a spokesperson for the Enterprise Corporation?

[2:15]

HON. MRS. McCARTHY: I can't confirm that. I don't know of any work that he has done, but I can check it out for you.

MR. WILLIAMS: Maybe at the same time the minister could check

out whether it is the same Craig Aspinall who was the communications

director for the Social Credit Party before that, and whether this is a

traditional career path under the new administration. Further, can the

minister recall whether this Craig Aspinall was the communications

director for her political party?

HON. MRS. McCARTHY: I can confirm that very many good communicators have worked with and will continue to support the Social Credit Party.

SOCIAL HOUSING ON EXPO LANDS PROJECT

MR. WILLIAMS: The answer is yes, and it's politics as usual in British Columbia.

Would the minister confirm that there is nothing written in the

contract with Concord Pacific requiring the provision of social housing

up to the 20 percent figure suggested by the city?

HON. MRS. McCARTHY: I can confirm that I have done, and the

Enterprise Corporation has done, exactly what was promised to be done

in the negotiation with the previous Expo site lands. It made a

commitment that the sale would take place with worldwide competition

and that when the sale was finished the developer, whoever the

developer would be, would have to deal with the city zoning, would have

to take this raw, unserviced, unsubdivided land to city council and the

planning department and make arrangements with them. Contrary to what

was said on March 30, when the leader of the official opposition of

this House said he feared that our government would overrule

Vancouver's zoning and building bylaws for the Expo lands, we have not

done that. We will leave the zoning, the decision-making, to the

planning department and the city of Vancouver.

MR. WILLIAMS: Can the minister confirm that if social housing

is to be provided on these lands by ministries of the Crown, we will

indeed have to pay for those lands back from Concord Pacific?

HON. MRS. McCARTHY: I cannot confirm anything that the member

is saying at this present time, because the application for social

housing, as far as I know Quite honestly, it could hardly be made while

the land is unzoned and in its raw state, as it is today.

MR. WILLIAMS: Then the minister is confirming that there is

no holdback requirement, and that the prospect of having to pay for our

own land which we sold wholesale...that we will have to pay retail for

it in the immediate future.

OMBUDSMAN'S RECOMMENDATIONS

MR. CASHORE: In the absence of the Premier, I would like to

direct my question to the Attorney-General. The government has shown

contempt and disrespect for the ombudsman's recommendations. This is

unfair to welfare moms, it's unfair to seniors, and it has caused

immeasurable anxiety and despair.

HON. MR. BRUMMET: A point of order, Mr. Speaker.

MR. SPEAKER: As the minister knows, we like to hold all

points of order until after the question period. If we start having

points of order on both sides....

The member for Maillardville-Coquitlam, please.

MR. CASHORE: The government is being constructively

criticized and just can't seem to handle that. How can the government

say it stands for fairness when your ministers reject, out of hand,

reasonable and timely recommendations from the ombudsman?

HON. B.R. SMITH: If ever there was a government that acted

positively and preemptively on ombudsman's recommendations, it's this

one. I can remember many suggestions that Mr. Owen has made in the past

year which have come to ministers and have been dealt with before they

even came into the public arena. I can also remember Mr. Haymour's

recommendation on Rattlesnake Island, which this government accepted in

its totality. We move fairly and promptly on ombudsmen's

recommendations; we're not the least bit reticent. We don't always

agree with him. That's our privilege, and it's his privilege to

recommend.

MR. CASHORE: The AZT and Principal Trust issues somewhat

belie what the minister is saying. By selling off government services,

the government is jeopardizing the future well-being of this province.

Not only that, but under privatization these services will be

transferred out of the sphere of the ombudsman's terms of reference.

What has the government done to ensure that private contracts

negotiated with government are covered by the ombudsman?

HON. B.R. SMITH: I heard Mr. Owen today on the radio, so

fortunately I know what Mr. Owen said and not what the member says he

said. Mr. Owen was not critical of privatization; indeed, he

acknowledged that government services could be carried on in-house or

out of house and done so equally. What he was urging was that there

would be some kind of monitoring, a process for checking them and a

complaint procedure that could be received. If a government service is

privatized, the citizen can go to that ministry and complain if that

service is not being carried out properly under contract. There is an

avenue to complain under. Mr. Owen is being portrayed as an opponent

and critic of privatization, but he's not.

MR. CASHORE: The question wasn't answered. The minister did

not tell the House what measures were going to be taken to ensure, as

Mr. Owen has requested, that those people will be covered.

Supplementary, Mr. Speaker. The Social Credit Party and the UBCM

have recommended that sections 3 to 11 of the Ombudsman Act, dealing

with municipalities, schools, hospitals and regional districts, be

proclaimed, and there has been a 15 percent increase in the number of

complaints received by the ombudsman's office, indicating that all is

not well in British Columbia. The ombudsman's report pleads

[ Page 4221 ]

yet again that sections 3 to 11 be included. Will

the Attorney General assure this House, in the name of fairness, that

the government has decided to proclaim these sections forthwith?

HON. B.R. SMITH: In response to the May 1986 memorandum from Mr. John Mika, the answer is that it's under consideration.

PROVISION OF AZT TO AIDS VICTIMS

MR. HARCOURT: I have a question for the Minister of Health.

Last Friday, in reaction to the ombudsman's report on the government's

very unfair AIDS policy, the Health minister said he does not believe

that all AZT costs should be covered by public funding. The minister

has had time to reflect on the unfairness of his response to the

ombudsman. Is he now prepared to endorse the ombudsman's

recommendations and adopt them as the fair and right government policy?

HON. MR. DUECK: Mr. Speaker, the ombudsman was asked to

determine whether we were discriminating against a certain segment of

society, namely the AIDS patients. Whether we were discriminating or

not was determined, and in his report, he very clearly stated that we

were not. Then he went on to make some comments on programs. I've said

it before and I'll say it again: we have a Pharmacare program in place

and it is for all drugs that come on the market. We will continue to do

that. Whether the program itself is fair, that is something for cabinet

to review from time to time. But we cannot make exceptions. What if a

new drug comes on the market tomorrow? Do we then say: "This is an

unused drug. This one does not come under the Pharmacare program, but

another drug does"? That makes our Pharmacare program completely

unviable, and we couldn't tolerate that.

MR. HARCOURT: Mr. Speaker, a supplementary. It was the

appearance of discrimination the ombudsman was looking at. Last Friday,

the minister severely rebuked the ombudsman for providing advice on the

fairness of health care policies because he wasn't a medical expert.

Well. Mr. Minister, your own AIDS advisory committee of medical experts

has concurred with the ombudsman's findings. They've also recommended

that this government cover all costs. So how can the minister reconcile

his continuing resistance to a fair approach to the AIDS treatment when

even his own medical advisers are telling him to do it?

HON. MR. DUECK: To begin with, I want it clearly understood

that we are not denying funding for the drug AZT, because we are in

fact, in most cases, paying up to $8,000 or $9,000 a year. We are

saying that the Pharmacare program — and I'll repeat it, in case you

haven't understood — is in place for all those people not on social

welfare and not over age 65. They pay a deductible of $300; after that

point in time, they pay 20 percent of their bill on a monthly basis to

a maximum of $2,000. If the Leader of the Opposition says to me that is

not fair, that $2,000 is too much, that's another matter. But that is

the Pharmacare program at present.

MR. HARCOURT: I have a supplementary. It's a question of

treating the hundred people who are desperately ill, and you are

dealing with them in a discriminatory fashion.

The ombudsman and your own expert AIDS advisers are saying: "Do the

right thing." Mr. Minister, are you going to finally make a decision to

treat these poor people properly and make funding available for 100

percent of the costs of the AZT drug? Yes or no.

HON. MR. DUECK: Again. I think we are trying to be fair to

all people and not to make an exception for AZT versus another drug. We

also have the growth hormone drug under the Pharmacare program. Again.

what is fair to you or to someone else.... I wish I could give everyone

everything free. Perhaps when you people were in power you had all the

money you could possibly use. I'm not saving that those 150 people who

are at present suffering from AIDS.... That's another matter entirely.

What I'm saying is that at present we have the most total drug program

of any province in Canada. We have a very generous drug program, but no

program is complete. It doesn't pay for everything or do everything for

everybody.

I'm telling you again that the program stands as I've explained it

before, and the maximum is $2,000. Other than that, we're paying out

millions of dollars. As a matter of fact, this year the budget is $178

million. I don't know what more you want me to do. Do you want me to

change the program and say it should be free to all?

SOME HON. MEMBERS: Yes.

HON. MR. DUECK: Would you be willing to pay maybe $800 million? You can't change it for one group; it's got to be for all.

TAXATION OF CHARITIES

MR. SIHOTA: A question to the Attorney-General on charity

taxes. On the one hand, we've seen in this province landlords and other

people at one time taking money away from charities that ought to have

gone to them. Now, because of the increase from 1 percent to 2 percent

of Bingo proceeds, we're seeing the government take more money away

from charities, to the tune of about $1.8 million this year. So we've

seen a kind of tax grab on middle-income earners which has been

relatively unfair. Why has the government chosen to penalize charities

by increasing its take from 1 percent to 2 percent?

HON. B.R. SMITH: Quite the contrary. What we have set out to

do is to get more money into the hands of charities. If you look at the

figures for the bingo take to charities, it's up millions of dollars

this year. The casino take to charities is up as well. That's because

of insisting that a certain percentage go into the hands of charities

and not operators; insisting also that they be honestly and fairly

regulated. In order to pay for the cost of the regulation and

inspection, we have increased the tax. It is going to be a

self-supporting type of regulation, but the end result will continue to

be that more money will find its way into the hands of charities.

[2:30]

MR. SPEAKER: The Minister of Education on a point of order.

HON. MR. BRUMMET: My point of order is that I believe the members of the opposition are making a calculated

and deliberate abuse of question period. Question

[ Page 4222 ]

period is supposed to be to seek information. Notice, Mr. Speaker, how regularly

and repeatedly — time after time after time — short questions are prefaced by a long

political diatribe that is carefully prepared in advance and read into the record of this House,

and it often has very little to do with the question that follows. I think we should get back to

what question period was intended to do: that is, to seek information rather than to make political statements.

MR. ROSE: On the same point of order, Mr. Speaker, it's

really out of order, according to Beauchesne, page 38,

section 117, to

cast reflections on the rulings of the Speaker, so I support the

Speaker in his decision to allow certain questions. I think he's quite

liberal in permitting political replies as well. But one of the things

I would like to congratulate the minister for.... He'll soon have

learned it; he's the Minister of Education. He tried yesterday and

today, but he didn't get away with asking a question on a point of

order during question period, and he's learned to do it afterwards. I

congratulate him for that.

MR. SPEAKER: I thank both the members for their comments.

Having been in this chair for such a short period of time, I've really

never noticed that any of the questions or answers were political.

[Laughter.] I think I have reminded members from time to time that they

should stick within the rules, but we try to do our best, and I think

that all members have listened to both sides.

HON. MR. STRACHAN: I rise to make a procedural submission to

you. Today just prior to adjournment the hon. Minister of Energy, Mines

and Petroleum Resources (Hon. Mr. Davis) rose to make a ministerial

statement regarding South Moresby, an issue which has met with

considerable concern from the public of British Columbia. The hon.

member for North Island (Mr. Gabelmann) on the completion of the

minister's statement asked if the opposition might defer a response

until their critic was appropriately in the House. Leave was asked for

and leave was denied.

I've canvassed Beauchesne and latterly statements and rulings of

Speaker Schroeder as an example. To quote from Beauchesne, we see that:

"Statements by ministers have now been given a

recognized place in routine proceedings. The standing order is

specific, but considerable latitude has been left to the Speaker to set

limits on the participants. The Speaker has emphasized that both the

government and opposition contributions should be brief and factual.

The purpose of the ministerial statement is to convey information, not

to encourage debate."

Speaker Schroeder goes on to say that it is stated

that leave was not required for ministerial statements, and affirmed

that a reply is allowed to members of the opposition and leaders of

recognized parties in this case.

Mr. Speaker, given that this ministerial statement was made by the

minister at the hour of adjournment, I would submit that the

circumstances for deferring a reply from the opposition were a bit

different than would normally apply. I would submit that I'm not trying

to establish any precedent, but in this instance, a reply should be

considered without seeking leave, and that reply should be considered

now.

MR. S.D. SMITH: Since I raised this issue this morning, I

want to, if I may, address it for a moment. I do so recognizing that

arrangements between House Leaders are important and that House Leaders

have great difficulty in making this place work, as it is. I suppose by

standing here I stand the risk, in some sense, of gaining the same kind

of tan for the same reasons as the first member for Vancouver South

(Mr. R. Fraser).

Nevertheless, my point was that the minister had extended the usual

courtesies of notice to the opposition and they were aware of the

timing of the statement. My concern is that while leave is not needed

normally, it is in fact the case that we ought to set some time limits

on that. I would be most concerned if by doing this we are establishing

the precedent that an opposition critic, or anyone, following a

ministerial statement, could at any time thereafter, without

limitation, stand and make a reply. I would commend to the Speaker that

if you are going to accept this request, you do so within very strict

limitations, because these rules will stand to govern us forever as

individual members. I think we ought to bear that in mind as much as we

ought to bear in mind the need to have agreements between our leaders.

MR. ROSE: I, in a rare moment, say that I support the

position taken by the Government House Leader. Since there was no

intervening time, since it was lunch time — I understand it took place

just before debate — there has been no lapse of time. I think the hon.

member for Kamloop's concern about our responding to this a week from

now is a little bit extreme. I ask him to calm his fears on that score,

because the hon. House Leader said that this is not to be considered a

precedent. I feel good about it, and I hope the member for Kamloops

does as well.

MR. SPEAKER: I thank all three of the hon. members for their

input. Without setting any precedents, and in view of the fact that the

minister's motion was made just before 12 and they're usually done

after question period and the possibility that the opposition debate

leader felt that that was going to be the time, I would allow the

opposition debate leader to make her statement now.

MS. SMALLWOOD: I'd like to thank the government House Leader and our House Leader for arranging this opportunity.

I think that the issue of what is going on in South Moresby is an

important one, not only for this Legislature, but very clearly for the

people of British Columbia and of Canada as well. We have heard over

the past year that the majority of people in B.C. and Canada support a

park in South Moresby.

My concern over the minister's statement and the government's

actions is one that stems from the government's actions a full year

ago, when the government was slow to act on the need for negotiations

to preserve this area in the first place.

I would be far happier if this government, rather than issuing

exploration and drilling permits for the South Moresby area, was doing

everything in its power to expedite the negotiations and bring to

conclusion the agreement to make the South Moresby area a legal entity.

Clearly, if this government saw this as its number one priority, it

would do things such as putting a moratorium on all industrial activity

in the area. We would call on the government and the minister to

[ Page 4223 ]

put a moratorium in place rather than complicating

the negotiations that are now underway, by possibly increasing the

activity in the area by issuing permits to allow exploration and

drilling.

On that encouragement to cease activity, I would like to again

encourage the minister to work with his colleague the Minister of

Environment and Parks (Hon. Mr. Strachan) to bring about the conclusion

of the negotiations so that we can all have a park we can be proud of,

a park we can have in place for future generations.

Orders of the Day

HON. MR. STRACHAN: Committee on Bill 18, Mr. Speaker.

SPECIAL ACCOUNTS APPROPRIATION

AND CONTROL ACT

(continued)

The House in committee on Bill 18; Mr. Pelton in the chair.

section 4.

MR. STUPICH: Just to refresh our memories, and also to bring

some of my colleagues up to date, this is a

section of the bill that

proposes to transfer to general revenue a substantial sum from the

Crown land account. There is a description of the Crown land account in

the estimates on page 200:

"This account was originally created as a fund by

authority of

section 7 of the Department of Housing Act, 1973. It was

replaced by the Crown land fund effective July 31, 1979.

"Revenue sources include leases of Crown land under the

Land Act, interest income and other land sales. Expenditure represents: land

acquisition costs for park, fish and wildlife conservation purposes; write-down

of uncollectable loans, costs associated with the sale of Crown land and the

sale or disposal of assets on Crown land; capital projects on University Endowment

Lands; and acquisition of social housing sites...."

The minister said that the money is being taken out of the Crown

land account because there is more in there than is needed. I would

like the Minister of Environment (Hon. Mr. Strachan) or the Minister of

Tourism (Hon. Mr. Reid) to get into this discussion and tell the House

that they don't really need the money that is in that Crown land

account for all of the purposes that are described in connection with

the description of the Crown land fund.

We're taking out of the Crown land fund some $222 million and

transferring it into general revenue. Out of another fund an amount of

$77 million is being taken from the small business forest enterprise

fund and being transferred into general revenue. Almost $300 million is

being transferred out of funds — not all of it in connection with this

bill. but certainly the bulk of it — and put into general revenue.

I find it hard to credit the minister's statement that his ministers

— particularly the Minister of Environment and Parks and also the

Minister of Tourism — can't find good ways of spending that money in

line with the description of the fund. However, he said it.

I want to ask the Minister of Finance — and others of my colleagues

may want to talk about the use of this fund and the way it's being used

up right now — if this $299 million shows up anywhere in the budget as

revenue.

HON. MR. COUVELIER: I've got a whole slew of figures here.

I'd appreciate it if the hon. member would identify the $299 million

figure he referred to.

MR. STUPICH: In the estimates for the year ended March 31,

1989, I'm looking at page 210 which lists all of the special accounts,

and about an inch plus down from the top is $222,021,777; at the top of

that are non-cash items with the reference number 3 at the bottom which

describes that. Also, further down that same column is $76,680,000 from

the small business forest enterprise fund which, according to the

description, is also being transferred to general revenue.

So $299 million is being transferred from special funds into

consolidated revenue. My question to the minister is: where does this

appear in the budgetary estimates of revenue for the year ending March

31, 1989? Or is it a different year? Is it included at all? Is there a

$300 million cushion sitting here that is just not taken into account?

We've already prepared our way for a result at the end of March 31,

1989 that is $300 million better than we anticipated because we didn't

think to mention the $299 million — I'd better be accurate.

[2:45]

HON. MR. COUVELIER: The figure referred to is merely the reduction in spending authority; it's not a transfer from one account to the other.

MR. STUPICH: The minister says it's a reduction in spending authority. Maybe we should go back to the BS fund.

The reduction in spending authority on the one side, yes; the debit

to the spending authority, the liability — but a credit to revenue?

It's accredited to consolidated revenue; the description tells us it's

being transferred to consolidated revenue. Where does it show up in the

consolidated revenue? You mean it's gone, blowing in the wind like the

BS fund?

HON. MR. COUVELIER: This is an account, not a fund. So it

doesn't have any money in it, in that sense. It's merely a flow-through

account, and it's not a fund. Therein lies one of the objectives of

this act. That is to say, we are redefining the titles of these

accounts. I think the hon. member has raised a valid comment, but it

refers to the heart of the legislation and the objective here, which is

to change the presentation format and the title so that we are now

dealing with accounts — or will be, with the proposed changes — and

we'll have only two funds, which are the budget stabilization fund and

the privatization fund. The other items will be accounts.

MR. STUPICH: The two of us can talk about this. I'm just

wondering how to phrase it so that everyone else can follow. We have a

liability on our balance sheet. It's the liability to spend money for

the purposes described by all of these funds. We used to have a

corresponding asset in the form of cash and investments that

represented the total value of all these funds. The Social Credit

administration lost that asset, we don't have that asset anymore. They

consolidated everything and lost it.

[ Page 4224 ]

Nevertheless, there is a special accounts liability totalling on

April 1, 1988 — including the revenue — some $897 million. We have said

that we owe this amount of money. We have decided to spend $897 million

for all these various purposes — almost a billion dollars. We used to

have the cash. We don't have it anymore; I admit that. No point in

having it sitting in the bank and then borrowing the $5 billion. I know

the cash is gone. Nevertheless, by legislation we've agreed that we

have a liability to spend $897 million on all the purposes for which

all these funds were established.

We got the money, for example, from this particular fund that we're

talking about right now from the disposal of Crown lands, from interest

revenue and from various sources like that. We actually received the

cash, we put it in the bank, and we spent it on something or other. But

at the same time, we've said we still owe that money to the purposes

for which this fund was set up. So we have a liability in our balance

sheet of $897 million with respect to the special funds. We're reducing

that liability right now. It's a liability; we're reducing it, so we

debit it. We have to credit something. We're crediting consolidated

revenue. We're saying that that money is now in consolidated revenue

and can be used either this year or next year to improve our deficit or

to increase our surplus, whatever the minister wants to do. It has to

show up on the revenue side of the.... At least, that's my immediate

thought; I wasn't thinking about this until I started talking. Does it

not have to show up on the revenue side of the...? I see the minister's

head shaking. Show me where the credit side is, then. It has reduced'

the liability. We're in double-entry bookkeeping, Mr. Chairman. What's

the other side of the entry?

HON. MR. COUVELIER: In terms of the daily cash management

techniques, the money flows through into the bank and is managed on a

daily basis. As the hon. member quite properly states, the

auditor-general requires us to maintain a double-entry accounting

system, and so the other side of the entry is these accounts or funds,

as the case may be.

We're having some trouble following the words being used by the hon.

member. We're talking here about the authority to spend. It is true

that by reducing the balance in the Crown land account, that amount is

being reduced. But it is the government's opinion that we don't need

those kinds of dollars for that stated purpose. That's not to say that

if there is a need arising in the future, we will not find the dollars.

The hon. member seems to be working on the thesis that if the dollars

aren't there, the program themselves are at risk — and we deny that.

We are aware of the interest in protecting the environment and

making acquisitions for parkland or preservation of wildlife purposes.

The minister in charge has made those appropriate

representations to the government, so I'm quite comfortable

telling the hon. member in the House that these initiatives themselves

!are not at risk merely by this accounting device change.

MR. STUPICH: Mr. Chairman, I think there are other colleagues

of mine who would like to talk about the purposes of the Crown land

fund, the legislation that was set up and what it was to be used for.

I'd like to go and get a copy of Public Accounts and come back.

MR. CASHORE: Mr. Chairman, I must say that I thought, in reading about

this Crown land fund on page 200 of the estimates book, that we had a confusing

situation here, but it's becoming more confusing by the minute.

My comments, as the minister knows, when I spoke yesterday during

second reading, had to do with one of the specifics of the explanation

in the footnote under the Crown land fund, which indicates that among

other things, this fund is to be used for the acquisition of social

housing sites.

It's very interesting that we would be looking at this on this

particular day, when we had a question in question period from the

first member for Vancouver East (Mr. Williams) directed to the

situation of the BCEC lands and the apparent lack of provision for

social housing sites. We did not receive any illumination from the

minister, who was questioned on whether we would have to buy that land

back from Mr. Li Kashing in order to have social housing on that site.

It seems to me, in view of the minister's own words just a few

moments ago.... The minister said that that money is being put back

into general revenue, or wherever it is going, because the need does

not exist. Then he said, "If there is a need arising..." and so forth.

It's very clear from question period today that a need does exist

with regard to the B.C. Enterprise lands. But more than that, a need

exists with regard to decent, affordable housing right throughout this

province.

I would like to hear the minister comment about the fact that

there's an apparent perception that a need doesn't exist. I find that

very interesting. It's my perception that a need does exist in the area

of social housing, and one of the most positive initiatives the

government can take in North America in these times is to purchase and

landbank land when the prices are appropriate for so doing.

I know that the minister is consulting with his advisers and is

therefore not able to hear all of the points that I am making, but I....

HON. MR. COUVELIER: I can follow you. It's quite simple.

MR. CASHORE: All right. I'll listen to what the minister has to say, and I'm sure I'll have some more things to say after.

HON. MR. COUVELIER: Am I responding to a question or is this an opportunity for a monologue on any subject? I didn't hear a question.

MR. CASHORE: I just want to place on the record that I regret

what the minister has just said. It was very obvious that, while I was

asking my question, the minister was carrying on a conversation. I

don't fault the minister for that. I know it's a difficult thing when

we're firing questions at you and you're trying to get the answers from

your advisers. But to stand up there and say that I did not ask a

question.... Hansard will

indicate that a question was asked. I'm quite prepared to ask the

question again, but with all due respect I find that most inappropriate.

The question is: with regard to the point that the member for

Vancouver East made this morning, that in view of the sale of the BCEC

lands.... We could not get a clear answer this morning as to whether or

not we were going to have to purchase land from Mr. Li Ka-shing in

order to provide for our own social housing programs. I'm asking the

minister, in view of his comment made a few moments ago that if there

is a need arising — and he went on to say, "We will go ahead

[ Page 4225 ]

and do something about it," is he not prepared to recognize that a need does exist?

I'm saying that my perception is that a need has existed for social

housing sites for quite some time, and that land banking, which is one

of the components of this fund, is very appropriate and cost effective,

given that the province has a commitment to provide social housing; and

therefore, specifically with regard to the BCEC site but more generally

with regard to social housing in general, is the minister saying that

there's really no need?

HON. MR. COUVELIER: I must confess to having some trouble

following a monologue that will take anywhere from seven to 15 minutes,

interspersed with a question somewhere, and I'm expected to stand at

attention without falling asleep. It's difficult to do. I'm accustomed

to questions being put and answers being provided, rather than speeches

in the meantime.

However, I responded to the first hon. member for Nanaimo (Mr.

Stupich) on the same issue. Obviously you didn't hear the answer or

chose not to. I suggest, with respect, hon. member, you are as guilty

as I in terms of not following what's happening here, or else you would

not find the need to ask the question a second time.

The issue is purely and simply: is this a spending account? The

answer provided earlier was: it is not. This is an off-balance-sheet

account, an off-financial-statement account. It makes no reference and

has no validity whatsoever to wrap this in the flag of the government

losing interest in initiative. That is not true and you cannot make

that leap of assumptions. I provided that same answer to the hon.

member for Nanaimo about 15 minutes ago.

Dealing with this government's concern about social housing, which

seems to be the issue that you are referring to in a generic sense, let

me just remind the member that the budget for social housing was

increased from $10 million last year to $12.5 million in '88-89. This

increase provides for, generally speaking, an increase in land costs,

and this allotment will require or provide for 1,900 social housing

units in '88-89, the same number that was provided in '87-88. So you're

wrong, hon. member, when you conclude that removing this

non-financial-statement account and reducing its size has the effect of

in any way limiting this government's desire to provide for social

housing. It categorically does not. That's the third time I've said it.

I hope I won't get yet another question on the same subject. You seem

to have some trouble following the spoken word.

MR. CASHORE: There will be several questions on this subject,

and this minister will not intimidate me or any other member of this

opposition with regard to asking legitimate questions.

[3:00]

I referred the minister to the footnote underlining the Crown land account,

where it points out that this expenditure was to be, among other things, for

land banking social housing. Therefore we are not referring to the so-called

1,900 units per year. I'm fully aware that there are 1,886 units per year

under the federal-provincial agreement administered under the BCHMC, but because

this government has in its accounts a fund with an explanatory note pointing

out that it's for acquiring land for social housing, we are looking at an

opportunity that goes outside the scope of the BCEC federal-provincial agreement

and enables the province to participate in a process of banking land for future

use with regard to social housing, a very appropriate thing to do. The city

of Vancouver has been involved in that. I want to commend the government for

what it has done in that regard in the past.

I'd like to ask the minister what was spent from this specific fund

in the last fiscal year toward land banking for social housing. I'm not

asking about the BCEC federal provincial agreement: I'm asking how much

money was spent in banking land for social housing from this fund in

the last year. The reason I'm asking is in view of the minister's

statement a few moments ago that if a need arises, we will address that

need. That's what he said.

HON. MR. COUVELIER: As I've said, we provided $10 million

last year. We're providing $12.5 million this year. If you're

suggesting that we should be building up some sort of a land inventory

and making expenditures out of this fund for that purpose, I can tell

you we have not done that.

MR. CASHORE: Am I to understand from that, Mr. Chairman, that

$ 10 million worth of sites for social housing was purchased? Is that

what the minister is saying?

HON. MR. COUVELIER: Is the objective here to consume time?

That's the answer I gave ten minutes ago. I'm sorry, Mr. Chairman, to

be difficult. The hon. member doesn't seem to want to recognize the

answers that I provide. I said that ten minutes ago. Last year we

provided $10 million for social housing. and we're providing $12.5

million this year. I don't know what more I can do to make it plain.

Furthermore, the member then went on to suggest that we should be

spending some money in banking land for some unknown, unexpected or

uncertain future use, and I've told him we do not do that.

MR. CASHORE: The plot thickens. It sounds to me as though the

minister is saying that the money that goes to the BCHMC for its

program of constructing approximately 1,900 units per year comes out of

this fund. Is the minister saying that that money comes out of this

fund?

HON. MR. COUVELIER: That's correct.

MR. WILLIAMS: I'd just like to go over this for a minute.

This minister comes on high and mighty as if he's got all the answers,

and he has very few. He constantly needs briefing, yet he comes on,

dumping on the opposition, when he doesn't understand. You reflect on

that, Mr. Minister. For the last few minutes, you've been talking about

the $10 million as land. It's the total package, is it not, for social

housing?

HON. MR. COUVELIER: No....

MR. WILLIAMS: No? Then you explain. It's not just a land-banking question; it's the total provision of social housing, is it not?

HON. MR. COUVELIER: For the edification of the dense member

for Vancouver East, may I say once more that this is for site

acquisition, Mr. Chairman. I think I've said it three or four times

now. It's not the total cost or the package; it's for site acquisition.

I don't know how many times I have to say it. With respect, if we have

to consume time — if that's

[ Page 4226 ]

the objective — why don't we go and have a cup of

coffee and come back when the time has expired? Wouldn't that be a more

useful thing to do? I've answered the same question four times.

MR. CHAIRMAN: Just before we continue, I think that at this

juncture it might be incumbent upon the Chair to suggest that some of

the terminologies and language being used in this debate is so close to

the border that it concerns me. I would ask all members, who are well

steeped in the practices of this House and certainly are well aware of

what is and is not parliamentary language, to think and restrain

themselves before they proceed with anything that might be construed as

a diatribe.

MR. CASHORE: Mr. Chairman, now that we have this answer, that

the $10 million is for sites, I take it that the other funds that go

into the BCHMC program come from elsewhere. This brings me back to my

original point: in view of the question that the first member for

Vancouver East asked in question period, we have a problem on the BCEC

site — at least, potentially — with regard to the fact that there

appears to be nothing in place for the acquiring of sites on that land.

The minister has pointed out that this money is for the sites presently

targeted under the BCHMC program. That targeting is not addressing that

BCEC land at all. That's number one.

Number two is that the number of approximately 1,900 sites per year,

as the minister says, is woefully inadequate in the need for decent,

affordable housing within this province. We see that we have a fund

here of $226 million being taken away from at least a portion of that

being used for acquiring additional sites. Again, the point is that

1,886 units per year is inadequate. Here's an opportunity to move

toward greater adequacy.

The minister says that if a need arises, we will address it; I'm

saying the need is obviously there. There are many people in British

Columbia — thousands of people — on waiting-lists for decent,

affordable housing. I don't think the minister has to get really upset

about my making that point; I think it is a valid point to make in this

debate.

MR. CHAIRMAN: Just before we continue, the Minister of Health would like to make an introduction.

Leave granted.

HON. MR. DUECK: We have with us today 120 grade 10 students

from the Mennonite Educational Institute in Clearbrook, Central Fraser

Valley. They came in four different groups; there were some attending

this morning. I believe this is the second last group attending today

in the House. Their teachers in charge are Ken Bartsch, Al Peters, Sue

Friesen and Stan Coutu. Would the House please make them welcome.

MS. EDWARDS: I would like to ask the minister a question,

because I understand this was done on the advice of the previous

auditor-general. The auditor-general also recommended a comprehensive

review of all the special funds and accounts. I'd like to know, first

of all, whether that kind of review was done. And since we're dealing

with this particular account, was there some exhaustive, comprehensive

review of this fund?

HON. MR. COUVELIER: The answer to the question, Mr. Chairman,

is that we have not yet undertaken such a study, but it is in this

year's work program.

MS. EDWARDS: In view of the fact that no review has been

done, I think it's rather strange to suggest that there are a lot of

idle dollars here. I think it's particularly strange, too, when you

look at what this fund was designed to do, as listed in the estimates

book — not only to talk about social housing sites, which we've

canvassed already and I won't go into in great detail, but also to

canvass the reason for establishing the fund which was to acquire land

for park, fish and wildlife conservation purposes.

I think that the Minister of Finance should perhaps — as the first

member for Nanaimo suggested — have asked the Minister of Environment

and Parks, because he has recently made a number of statements

indicating that there certainly weren't dollars that should be idle

here if the government chose to carry out its policy statements. One of

the things that the Minister of Environment and Parks has said is that

he intends to — in fact, the government will — lead us to that great

day when 6 percent of the land mass of the province is in parkland.

That may not necessarily require a lot of land purchase; but I remind

the minister that the purpose of the fund is to develop as well as

purchase land. So there may be some of that to be done. The Wilderness

Advisory Committee recommended the 6 percent figure, and the Minister

of Parks has said that we are going to that figure. To suggest that

$226 million is not going to be necessary in order to reach that goal

seems a little strange to me.

I would also remind the minister that the requirement and the need

for park, fish and wildlife conservation purposes has certainly not

been exhausted. In fact, in my area of the province we have people

meeting every day of the year, worrying and figuring out ways to find

out how they can get hold of more land which will work for the

preservation of some wildlife species that need more and better

habitat. They need controlled habitat at different places in order to

maintain a healthy existence.

To use a recent example that has been in the news, Mr. Minister, a

heritage stand of Sitka spruce is evidently in a certain situation

where the government is looking for ways, I hope, of being able to

maintain it. There are any number of examples, and I bring these

examples up out of the last few minutes. I am certainly not unusual in

being able to draw these examples out of my experience. I think that

were you to canvass every member in this House — not just on the

opposition side, but on your own side as well — they could find all

sorts of ways in which the functions of this particular fund could be

used to the advantage of the people of this province, instead of being

moved off into general operating revenue.

I'd like to ask the question before I sit down: why is it that you

are not using this fund? Why are you returning the $226 million to

revenue instead of using it for some of these particular purposes?

HON. MR. COUVELIER: I guess it develops that I have to give

repetitive answers, not only because some members fail to catch it when

they are in attendance, but also because other members have missed my

earlier answers and walk in and put the same sort of question.

The answer that would be pertinent to your concerns, hon. member, would be that this is an off-financial-statement

[ Page 4227 ]

account. It is merely an isolation of some dollars

that creates an authority to spend. Reducing the dollars does not

diminish in any way this government's commitment to those spending

initiatives. Our taking these unnecessary surplus dollars, which have

been there for years, out of this off-financial statement account and

reducing it in size should not cause you to leap to the conclusion that

we will be reducing our expenditures in this area. Indeed, my hon.

colleague responsible and I calculate that our expenditures in this

coming year will be about $1.5 million — give or take, depending on

negotiations — for additional park acquisitions and probably something

in the order of half a million dollars for habitat concerns. Those will

vary as negotiations take place.

[3:15]

We are anticipating a minimum $2 million expenditure on the very

things you wax eloquent about. This government is not abandoning its

interest in that area, and the fact that we have decided, after a

number of years, to merely reduce the balance in this off-financial

statement account, I think, has no effect on the concerns I hear

expressed from the members of the opposition. You make an assumption,

or leap to a conclusion, that is not justified in face of the facts.

Indeed, as I've said, we're providing money for social housing out of

this account this year — more than last — and we're providing money for

parks and habitat preservation out of this account, as we did last year.

MS. EDWARDS: I guess what the minister is telling me is that

when the government sets up an account, we are saying to the people of

this province that we are going to use certain funds for certain

functions. When you set it up and you lay it out, and you say that the

money that comes in is going to come from these certain places, that

the revenue sources are a, b, c, d, that the expenditure shall

represent a, b, c, d, then you don't mean it. If you don't think you

want to do that, then you're not going to allow it this year; and if

it's going to happen, we're going to do it differently next year. The

minister is telling me that setting up this kind of fund is a whole

shadow act that means absolutely nothing in terms of what the actions

of the government will be.

He suggests that he is spending a certain amount of money on these

functions. Of course, I hope he is spending a certain amount of money

on conservation funds and so on, because in fact there are other funds

that are dealt with in other parts of this bill that also deal with

habitat conservation and wildlife preservation, and so on. I'm

suggesting to the minister that what he's doing is going against the

idea of why the fund was set up in the first place. He is not doing

that with the other funds.

The other funds have reasons to be there. It's maybe a flow-through

fund. It can be any kind of a fund you like, but you set it up for some

reason, and you tell the people of the province what these funds shall

be dedicated to. Then when it comes time to move them over into general

revenue, you decide that they are not dedicated "to" anything at all,

unless you decide that they shall be, and the fund in fact becomes

something quite different than it was at the beginning. Are you willing

to own up to the fact that the fund is not what you originally set it

out to be?

HON. MR. COUVELIER: I don't know how much more I can expand

on what I've said earlier, repeatedly. The fact of the matter is that

the funds have sat there — an unusually high, unrealistic figure — for

a number of years. All we attempted to do was clarify and simplify the

accounting procedures. The members keep making some assumptions which,

I think, are not justified on the basis of facts. It would be useful at

this point, I think, to get on the record some general information

about park ownership and acquisition. I would defer to my colleague the

hon. Minister of Environment.

HON. MR. STRACHAN: A great deal of debate and, I think,

genuine concern is expressed by the member for Kootenay (Ms. Edwards),

and I realize that's her role as critic. I'm not trying to duck the

issue now. I'd be more than happy to get into my involvement with the

Crown land account when we get to my estimates, which I understand are

coming shortly.

Nevertheless. let it be said that I've tapped this Crown land

account quite extensively, and I quite enjoy doing it. Botanical Beach,

I guess, was the last issue; also the foreshore at Robson Bight. I can

bring numerous examples to the Legislative Assembly, if given the

appropriate amount of time, as to the parks pressure on this account.

I'm quite satisfied with the results I've had.

Currently, we have 5.3 percent of the province in park area, and our

intent and our plan, shortly after the turn of the century, which is

not that long away, is to have 6 percent of the land mass in British

Columbia in park or protected wilderness. So I think that's a notable

objective. I'm quite sure that the Crown land account will be there to

allow us to do that. The Crown land account will be there also to

satisfy other ministries, such as Social Services and the Ministry of

Forests, for the purposes that they want to use that account for.

I know the member would like more debate on that specific issue

under the

section of this bill, but I would submit, sir, that it's

probably far more appropriate when we discuss my estimates and my

spending on the Crown land account with respect to park acquisitions.

MS. EDWARDS: Thank you very much, to the Minister of

Environment and Parks, but the issue is how the money is spent right

now, why the change, why you would move it and what you can do with it

because you move it. I think the issue is: why is the minister saying

that with this particular fund the other funds are being moved as they

are?

This fund is not being moved, the way it is, with the goals and the

criteria for spending that were in the fund originally, and I think

that's the issue. I think the minister has said very clearly it doesn't

matter to him what the criteria were, and that's how I read it.

Certainly we will be debating the fund itself in your estimates.

MR. STUPICH: When the Minister of Environment got into it, I

thought I might ask him a question. When he spends some money out of

this account, is it charged against his expenditures?

HON. MR. STRACHAN: The answer is no, Mr. Member.

MR. STUPICH: I thought that would be the answer. If he brings in any revenue, does it come into his ministry in some shape or form?

HON. MR. STRACHAN: As a matter of fact, that will be dealt with when we get to

section 8 of this bill. The only

[ Page 4228 ]

account I know of that I have contributed

specifically to and is controlled totally by the Ministry of

Environment is the habitat conservation fund. I look after the funds of

the shareholders, if you will, who are the people who buy angling and

hunting licences. The rest is administered by my hon. colleague, and as

you know we all go cap in hand and do our best to get what we want to

do with our appropriate ministries.

MR. STUPICH: Another fund in here — and I'm not dealing with

the fund; I'm simply trying to get at the truth of the matter here — is

the farm income assurance fund. I asked this question earlier. Advances

were made to the farm income assurance fund because it was running

short of money. I would assume that those advances were charged against

the expenditures of the Ministry of Agriculture.

HON. MR. COUVELIER: That's correct.

MR. STUPICH: I asked the minister in an earlier debate

whether he expected to get that money back, and he said yes. I think

the figure was in the neighbourhood of $11 million. When he gets that

money back, will it come back into revenue?

HON. MR. COUVELIER: The answer is yes, Mr. Chairman.

MR. STUPICH: Again I ask the minister: we are now taking out

of one of these funds — in this case, the fund that we've been talking

about most of the afternoon — some $222 million. Will that not come

back into revenue, the same as recoveries from any other fund, and if

not, why not? I note on the bottom of the page here: "Return of

spending authority to the general fund." It would seem to me that it's

giving the minister the authority to spend this $222 million in some

other way. "Return of spending authority": he will have the authority

to spend, is the way I read it, but maybe I'm reading it incorrectly.

HON. MR. COUVELIER: These accounts or funds are off-financial-statement. They are merely the authority to spend.

I think the hon. member has opened a whole new line of explanation,

and it might be useful to remind the House of the comment made by the

hon. member for Kootenay (Ms. Edwards), I think. That is to say, the

auditor-general had some interest in this issue back in 1986, and the

effect of having that sum of money in that account was to remove from

the budgetary discussion process the opportunity to comment. It does

seem to me that if your interests are in protecting the House's right

to comment on expenditures, it's in your interests to see this unused,

large balance reduced so that government doesn't have that kind of

flexibility. The auditor-general made comment about it in his 1986

report.

With respect, I do believe that the concern expressed by the members

opposite is misplaced, and that the government has no intention of

abandoning the purposes for which these accounts exist merely to make

sure that the dollars that are there are somewhat indicative of the

dollars that may be needed to do the job.

MR. STUPICH: In all honesty, I'm trying to understand.

Certainly, the special account, the special funds, the perpetual funds

all were, not too long ago, real liabilities backed up by real assets.

I know that that's changed. Is the minister telling me now that they're

not real liabilities anymore, they're simply memoranda accounts? Is

that all they are?

HON. MR. COUVELIER: That's the effect of it: of

financial-statement entries. The balance does not represent a

liability, it merely represents the authority to spend.

MR. STUPICH: Is that what's happening with this legislation,

or has that happened in the past? Have these been off the balance sheet

for some time and I just didn't notice the missing $800 million?

HON. MR. COUVELIER: We want to make very sure we understand

your words, and that explains our hesitation. They always were

off-financial-statement issues.

MR. STUPICH: Not always.

HON. MR. COUVELIER: Well, the hon. member goes back a long

time, and I don't doubt for a moment his memory bank would bring back

and recall some earlier method of treatment. These were off-financial-statement accounts last year as they are this year...?

MR. STUPICH: Maybe we should postpone this section.

HON. MR. COUVELIER: Anyway, it does not represent a

liability. It does represent authority to spend. I do suggest that it

is in the interest of the member opposite to see that authority to

spend reduced. It represents dollars that we're not going to need and

historically have not needed. No one should draw the conclusion that we

have lost our enthusiasm for social housing or habitat preservation or

acquisition of parklands. That's not a conclusion that can be fairly

drawn from this rather simple accounting simplification.

MR. STUPICH: Well, Mr. Chairman, how can I jump, if I've got

no place to stand? I'm really trying to find out where we are, and not

be judgmental at this point, because I'm having a little trouble

understanding. I thought from some of the remarks that have been made

that these have been balance-sheet items, but this legislation before

us right now is changing that so that they will no longer be

balance-sheet items. This is something from one of the people not in

the House, Mr. Chairman. I thought I heard those comments from across

the floor. While that someone who is not in the House is discussing it

with the minister, perhaps you and I had better just chat about

something or other until the minister is prepared to comment.

As I say, I got the impression from someone that they had been

balance-sheet accounts. I knew they were in the past, and not that far

past. They were real assets. But even after that, the balances

represented commitments — liabilities really — to spend.

[3:30]

In the case of the agricultural income assurance fund, for example, we've talked about....

AN HON. MEMBER: Deferred liabilities.

MR. STUPICH: Deferred liabilities — well, liabilities really;

"deferred" means a little bit longer. These are liabilities at the end

of the year. On March 31, 1989, it's

[ Page

4229 ]

expected that there will be $22,281,055 in the farm income assurance fund.

It's there to be spent in the activities of the farm income assurance fund

as it's needed; it's not a liability in the sense that they can identify

to whom its payable. But the government has received from farmers premiums and

received from the Minister of Agriculture allocations that add up to this point

in time to $22 million. It has said: "We will spend that amount of money

on the farm income insurance program." It came from farmers; it came out

of Ministry of Agriculture expenditures. It's real. It's not just a

bookkeeping, non-balance-sheet item. It's a balance-sheet item. I wonder

what the difference is.

I'm not sure how much time you and I have to discuss this, Mr.

Chairman. Whenever the minister is ready, I'll be quite happy to sit

down and see if he has any other.... Shall I start again, now that I

have your attention? I thought I heard someone, not in the House,

saying that these had been balance-sheet items but that this

legislation changes that. Maybe I didn't hear that, but I thought I

heard it.

Mr. Chairman, I have to wonder who prepared this legislation. There

has to be somebody somewhere that.... Do you understand my questions,

Mr. Chairman? I know you don't know the answers, but can you understand

what I'm saying? Does it seem that difficult? I didn't think it was,

but maybe it is.

HON. MR. COUVELIER: Mr. Chairman, a little time to frame the

appropriate response would be useful. We seem to have some difficulty

getting our terminology straight, so it might be productive if we had a

little time to put that together.

MR. CHAIRMAN: Would you like to defer

section 4 till later?

MR. STUPICH: Since it is dealing with funds all the way down

the line, I'd like to move that the committee rise, report progress and

ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

HON. MR. STRACHAN: Mr. Speaker, the committee on Bill 18 rises, reports progress and asks leave to sit again later today.

Leave granted.

MR. STRACHAN: I call committee on Bill 19.

PROVINCIAL-MUNICIPAL PARTNERSHIP

(TAXATION MEASURES) AMENDMENT ACT, 1988

The House in committee on Bill 19; Mr. Pelton in the chair.

section 1.

MR. STUPICH: I assume that these are buildings on which the

government is collecting school tax, rather than the local authorities.

Is that the case?

HON. MR. COUVELIER: That's correct. I think the hon. member raised

this issue yesterday. It's the government that collects the non-residential.

MR. WILLIAMS: I missed the previous explanation, Mr.

Chairman, and I wonder whether the minister might give a short

explanation of how this in fact works and whether it is very common.

HON. MR. COUVELIER: This amendment extends eligibility for

tax relief to owners of vacant or partially vacant industrial

buildings.

Section 3(2) applies to industrial buildings and municipal

areas used for the purposes of a new business. The existing provision

limits eligibility for tax relief to lessees who are responsible to pay

municipal property tax.

MR. CLARK: Just a very simple question: why? What's the

purpose? Why are you extending the tax relief to owners of vacant or

partially vacant buildings?

HON. MR. COUVELIER: It's a question of equity. This is an

initiative to help get economic development going at the municipal

level. Insofar as the municipalities themselves bring these initiatives

forward, it's our attempt to ensure that there is equity in the system

between owners and occupiers or tenants. So this is an initiative to

enhance economic development.

MR. CLARK: I don't understand how giving tax relief to owners

of vacant buildings induces economic development. Maybe the minister or

staff could give us some indication or some example where that might be

the case.

The second question: what's the projected tax loss attributable to the passage of this act?

HON. MR. COUVELIER: Buildings that were previously vacant

were not eligible for this tax credit. This amendment allows those

buildings to be used for the tax credit, and the amount of tax credit

that can be provided is up to 50 percent of the taxes to be paid. This

program has been in place for some years: this is merely an extension

of the provisions for buildings that were previously vacant and have

since been leased for new enterprises.

MR. BLENCOE: I suspect that this is an expansion of the

Partners in Enterprise program. When you brought that down some years

ago, this particular component was not part of it, and it's my

understanding that those property holders within this component have

come to you and suggested that they would like to see an expansion of

this tax exemption.

HON. MR. COUVELIER: Municipalities.

MR. BLENCOE: Right. I have no particular problem with it,

except that I've always been somewhat dubious about the Partners in

Enterprise program. I'm still not convinced that tax breaks for

industry is the way to attract industry to this province. I certainly

have had no reports of great new enterprises moving into British

Columbia because of the Partners in Enterprise program. There have been

some new industries, I know; but I don't believe it's because of the

Partners in Enterprise program.

As a matter of fact, I thought the Partners in Enterprise program

had died. We certainly haven't heard anything about it in the last few

years. When it was before us, I was very skeptical, as the rest of our

side of the House was, that what you were doing through a tax

forgiveness was pitting one

[ Page 4230 ]

municipality against another, creating regional

differences and animosity, with everybody chasing the same industries.

What has happened is that the richer municipalities that can afford to

give tax breaks do so, while the smaller ones are not in a position to

do that.

We have suggested that the way to encourage enterprise in British

Columbia is to create an atmosphere of wanting to invest in this great

province. Over the last few years the atmosphere that has emerged, the

confrontation over Bills 19 and 20 — those sorts of things.... If we

create the atmosphere rather than tax breaks; if captains of industry

see a healthy province — its education system, social service networks

and universities: healthy, and the business community with a fair

taxation system — then you start to get the captains of industry in

other jurisdictions moving to British Columbia.

Although we won't oppose this piece of legislation, we remain

skeptical about the potential for its impact in attracting industry to

British Columbia.

Sections 1 and 2 approved.

Title approved.

HON. MR. COUVELIER: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 19, Provincial-Municipal Partnership (Taxation Measures)

Amendment Act, 1988, reported complete without amendment, read a third

time and passed.

HON. MR. STRACHAN: Mr. Speaker, I call second reading of Bill 2, printed in the name of the hon. Minister of Municipal Affairs.

HOME OWNER GRANT AMENDMENT ACT, 1988

HON. MRS. JOHNSTON: The amendment to

section 1 of the Home

Owner Grant Act ensures that renters do not receive a homeowner grant

in the rural areas of the province. The intent of the legislation is

that only the owner-occupier receives the grant. This amendment

eliminates the situation in which the landlord, who is assessed and

liable for the tax, is able to enter into a lease arrangement whereby

the renter-occupier becomes an eligible occupant and claims the

homeowner grant for the benefit of the landlord.

Mr. Speaker, I move the bill be now read a second time.

MR. BLENCOE: We intend to support the bill. It's a reasonable piece of legislation.

There are a number of other areas in the homeowner grant that could

be looked at. I'm sure the minister is probably hearing about them. For

instance, veterans who come off the veterans' program between 60 and 65

fall in the gap between; they can't get the homeowner grant and they've lost the help in

paying their taxes they get under the veterans' system. I'm sure that

has been drawn to the minister's attention. I'll be bringing that up

more in the estimates.

One of the things the minister may wish to consider, while we're

talking about the homeowner grant system, is that it would be nice to

see one day an increase in the homeowner grant. We haven't seen an

increase for a number of years. I know many of the municipal

associations have put forward official resolutions — the AVIM did —

asking the government to consider increasing the homeowner grant. I

forget exactly when was the last time it was increased, but it was

quite some time ago. That would certainly be welcomed by homeowners in

the province of British Columbia. The minister would welcome it too,

she tells me.

Mr. Chairman, we support the legislation.

HON. MRS. JOHNSTON: I move second reading.

Motion approved.

Bill 2, Home Owner Grant Amendment Act, 1988, read a second time and

referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

[3:45]

HON. MR. STRACHAN: Committee of Supply, Mr. Speaker.

The House in Committee of Supply; Mr. Rabbitt in the chair.

ESTIMATES: MINISTRY OF

TRANSPORTATION AND HIGHWAYS

On vote 67: minister's office, $280,361.

HON. MR. ROGERS: I'm prepared to discuss briefly these

matters of my estimates, just to get the ball rolling while the

Minister of Finance, who will be listening in his office, and his

staff, who will be very diligently listening in his office, are rounded

up and brought back so that he can continue with the matters which the

House wishes to debate forthwith. In the meantime I shall discuss this

matter, or would you wish that I move the committee rise and report

progress?

Is there a point of order?

MR. ROSE: I was given to understand — and I guess there was a

failure in communications — that we were going to proceed, by leave, to

the next stage of 17 and 14 this afternoon in order to provide each

side with a little bit of warning on the Highways estimates. If that's

not the case, then I invite the minister to proceed with his

introduction and we will defer our response until after 14 and 17 have

been dealt with.

HON. MR. ROGERS: I think I will proceed with the opening remarks on

my estimates until such time as the Minister of Finance can be brought in. When

he is, then perhaps we will make the appropriate motion.

I'm really enjoying portfolio number six for me, and that's the

Ministry of Transportation and Highways, which also includes the

responsibility for the native secretariat, B.C. Ferries and B.C. Rail.

I would like to think that we view the highways portion of the

Ministry of Highways as in the post-Coquihalla era. There are a number

of post-Coquihalla changes that have been made in this ministry, which

I hope reflect those lessons

[ Page 4231 ]

which we have learnt in the process of constructing that major project.

Our total budget for this year is $731.3 million, which is a 14.2

percent reduction, reflecting some efficiencies and reductions in the

work done by this ministry. However, we are dedicated to quality

highway construction and service standard, and I've asked my ministry

to prepare a detailed and long-range plan which might reflect the

transportation development affecting this province up until the year

2000, not just to include highways but seaports, rail developments and

improvements to air services. As our transportation needs in British

Columbia continue to expand and we are in a relatively confined area,

we require a special look at it. We haven't got the luxury of some of

our colleagues on the Prairies of being able to go in almost any

direction.

I look around with trepidation to find my colleague the Minister of Finance. I presume he's lost.

Phase 3 of the Coquihalla Highway will be completed to Peachland

within the original budget estimates and, as I have announced in the

House and elsewhere, it will be built as a high-speed, two- and

four-lane standard road. To assist us in this particular project, a new

director of major projects will monitor the scope, budget and

scheduling of the project with the help of independent highway

consultants and auditors to assure the people of British Columbia that

the project is being constructed and completed as forecast.

Work will continue on the Richmond freeway

section of the Annacis

Island project, which will be completed in the spring of 1989. The

ministry will continue its program of upgrading Highway 97 to four

lanes through the Okanagan Valley. We will honour our commitment under

the federal government cost-sharing agreement to upgrade the Yellowhead

Highway. Each government will spend approximately $18 million on this

project over three years.

The ministry will review design options and construction techniques

to determine new ways to upgrade the highway between Horseshoe Bay and

Whistler without necessary road closures. This has been a terribly

contentious piece of road.

and the city of Vancouver for a cost-sharing formula for the Cassiar

connector.

Interjection.

HON. MR. ROGERS: The applause is from the member for

Vancouver East, and I thank him for his support on this issue. I will

just digress a little bit on this. Because the port of Vancouver is the

major beneficiary of this particular project, and because this road

access to the port of Vancouver is probably the most critical thing in

ensuring that the growth will go ahead, we have asked Ports Canada, the

port of Vancouver and federal Public Works and just about anybody else

we can talk to if they can't see, in their wisdom, a way to contribute

in part to the cost of this thing.

One of the greatest inhibitions on the growth of the port of

Vancouver is the delay in getting from the docks to the freeway.

Removing this one bottleneck will do much to ease the congestion for

everyone. It is the number one traffic problem west of Toronto in all

of Canada, and it is a priority. We have also worked with the city of

Vancouver, because they have a number of community designs which they

want to incorporate in this.

Not everyone will always be in agreement on this project. There are

some contentious neighbourhood issues, and we are trying to take into

consideration as many of these considerations as possible. We have a

design which would allow most of the transport trucks to move from one

end to the other without stopping — that is, without lights and without

righter left-hand turns of the 90-degree type. We are going to try to

do that.

We have asked the engineering design branch to prepare for

construction of the Vancouver Island Highway, the part near Qualicum

Beach. The project will provide a

section of four-lane link between

Victoria and Campbell River. We are also working on the design for

several parts of that particular highway as it affects all the

communities. To look at it from a purely superficial point of view,

people say a bypass here and a bypass there will solve the problem, but

how that commercially and socially affects the communities is very much

on our minds, and we are trying to accommodate as much as possible the

requirements of the local communities.

On the matter of road safety, the ministry will introduce a

mandatory province wide vehicle inspection program to be conducted by

the private sector. These will be conducted by garages and service

stations and will be done at a reasonable cost. The proposal at this

point is that prior to the annual renewal of an ICBC licence tag — at

some point in the 60- to 90-day period prior to that — the vehicle

would have to be taken to a regular service facility to be inspected.

We're now looking at removal of a front and rear wheel to inspect brake

pads, steering linkage. headlights, windshield wipers, doors, locks,

tail lights, etc. — something in about the half-hour inspection range.

Based on the shop time that most places charge, that's probably a

maximum $25, and lower if required.

What I am looking at now — and this is strictly at the early stage —

is to make it relatively easy for service facilities to get the ticket

to inspect vehicles. Once they have been found in violation — i.e. if

somebody chooses to endorse a vehicle that is in fact not safe — they

will lose the privilege, and the loss of that privilege will be so

onerous as to be the disciplining factor.

The garage will issue an inspection certificate which will stay in

the glove box of the car, and if we find a vehicle that is grossly out

of compliance we can go back to the people who certified it. This way I

think we would be able to capture the vast majority of vehicles in this

province.

We are working with the federal and local governments and other

agencies to improve the safety standards on transportation of dangerous

goods, which also includes hazardous goods. I would remind members that

that's only about 1 percent of the goods that are moved, and dangerous

goods really are the vast majority of those goods that travel that need

special care.

We will introduce new commercial vehicle weight and dimension

regulations to coincide with the current standards in other western

Canadian provinces. It's always been a bone of contention in the

trucking industry that when you cross an interprovincial border the

rules change, and sometimes the carriers that are coming in are not

aware of those, so we will try and do that. In fact, the whole of

Canada is trying to standardize on it. Staff in my ministry have been

working with staff in other ministries to try to be consistent.

The traffic safety committee of cabinet will introduce action plans

to improve traffic safety for the licensed drivers in British Columbia.

We have had some meetings so far. We have had a completely diverse

group of people, including the association of motorcyclists, the

driving school instructors

[ Page 4232 ]

and all of the commercial drivers that we could see

fit to invite, the Automobile Association and others, and we asked them

for their submission as to ways in which we could improve traffic

safety. Road accidents remain the number one non-medical killer in this

province, and we are working on it.

Air transport assistance program. This year ATAP will provide $3.3

million in assistance to local airports. This program has been

excellent in terms of opening up community airports throughout the

province and in enhancing air services not only from a tourism point of

view but from the point of view of medical evacuation and access to

small communities that wouldn't otherwise have it. The list of

communities that wish to participate continues to grow, but in most

cases they're enhancing existing services, adding such things as lights

and long-socks, and in some cases a simple telephone at the airport is

a big improvement. I can speak to this matter with great personal

involvement, as can many members of this House who happen to be

licensed pilots and travel to some of these airports. I can assure

members that money spent on this program is very well spent for the

limited number of dollars involved.

We are considering expanding the role of highway maintenance people

so that when they are in the vicinity of a licensed airport not

operated by a municipality, they take it under their responsibility to

also plow it during the wintertime, which has not been the case in the

past — or at least there has been inconsistency in the past. In some

areas Highways took the opportunity to look after the airports; in some

cases they didn't. I'm going to try to standardize that.

We've had the successful privatization of the Langford sign shop. I

expect a number of new privatized initiatives will be brought forward

by employees in the various departments of this ministry.

The progress in privatization of road and bridge maintenance will

continue in the 28 contract districts across the province. Current

highway safety and service standards will be maintained, and I would

like to re-emphasize that.

In terms of the B.C. Ferry Corporation, the growth in this

particular sector of my ministry, or corporations for which I am

responsible, is nothing short of phenomenal. This year, with all

projections, we are going to exceed the kinds of loads that we

experienced during 1986, during Expo. Approximately 50 percent of the

passengers and 50 percent of the vehicles are on routes 1 and 2 — that

is, Swartz Bay to Tsawwassen and Horseshoe Bay to Nanaimo. That makes a

difference over 1985-1986, the year prior to Expo: it's up 21.9 percent

for vehicles and 35.8 percent for passengers. That's on our major

routes. Our growth continues virtually on a projection that is, I

think, ahead of expectations, although the Ministry of Tourism

continues to say that they told us so. We continue to receive growth.

It's not all tourists, of course. We have enabled the government to

reduce the subsidy to the corporation by $6 million, to $51 million in

fiscal 1988-89. And the traffic increases will enable the corporation

to maintain its service in the southern Gulf Islands and increase

levels of service to the travelling public through 1988-89.

[4:00]

If I go down the various routes of the thing: for Sunshine Coast,

passenger and vehicle increased 4 percent and 6 percent respectively,

an increase in revenue of 17 percent over the same period last year,

while the costs have declined 5 percent.

I must say that of all the Crown corporations I've been responsible

for in the many years that I've been here, this is one where I think

the public should be proud. It is really a well-run and efficient

company. While we probe at the board level deeply into the various

aspects of how the company is run, they always have not only an answer

but a correct answer for what's going on.

I could go on to the other ones. The northern Gulf Island loads are

not.... The growth isn't quite as fast as it has been in the southern

Gulf Island. I want to talk briefly about the northern route. With the

Queen Charlotte Islands, along with the government of British Columbia,

B.C. Ferries is going to be quite severely affected in our capacity to

handle the volumes that we expect on those two particular runs. It's in

that regard that we will probably have to look for replacement of the

Queen of Prince Rupert , the older vessel that currently runs between

Skidegate and Prince Rupert, as its capacity to handle the volume that

we expect to find is very limited. It would probably be in order to

suggest that the Queen of the North will be retired to that route and

we will put a larger vessel on between Port Hardy and Prince Rupert.

The difficulty is, of course, that in the shoulder seasons we get a

fairly good load, in the summertime we're full to the gunwales, and in

the wintertime we sail largely with only a limited amount of passengers.

There is expansion of commercial operations in Bella Bella, with the

band building themselves a fish-processing plant, the product of which

they wish to move by container vessel from Bella Bella to Port Hardy.

Therefore we have to examine the possibility of constructing a roll-row

facility there, in addition to the fact that we currently carry

passengers. As it currently stands, people who live there often go to

Port Hardy for the day to go shopping and then turn around and come

back, and it's convenient for them, although it probably inhibits the

operation of their store.

In terms of new vessel construction, I have spoken on this, and the

member opposite asked me a number of questions. If we look at the

longer-term projection, we are going to need to increase uplift

capacity. Frequency doesn't seem to be too big a problem; it's uplift

capacity. Of course, in the wintertime, with sailings every two hours,

missing a sailing and having that long a wait is something we try to

avoid. As our loads continue to grow, we see continued growth in the

size of vessel we will need. We will not be building a Cowichan-class

style of vessel. The double-ended vessel has been passed in technology

by the modem vessels that use bow thrusters, controllable props and a

number of other things. So we anticipate building a more conventional

style of vessel that would operate on those particular runs. We expect

to see new vessels on all the major runs, and we'll try to do that in

an orderly fashion.

One thing that would be nice is to see B.C. Ferry Corporation's

shipbuilding requirements become part of the economic base for the

shipyard industry in British Columbia — not that we're their only

business, but that we're part of the bread and butter of it. There is

capacity in North Vancouver, in the Fraser River and also here in

Esquimalt or Victoria to build parts of these vessels. And there are

other places that may want to see expansion. Certainly some smaller

shipyards have grown in capacity and may be able to bid on some of the

smaller vessels that we'd like to do. But I would like to do it on a

continuous basis rather than a "we're building, we're not building"

basis. The shipyard industry has, quite frankly, lost a lot of its

skills and expertise by having laid people off

[ Page 4233 ]

during the tough times; then when they rehire, the skills are rusty, and getting things going is pretty expensive.

The trucking industry is continuing to expand. The number of trucks

on the road and the volume that they move continues to grow. The same

thing can be said — not in quite such numbers — for B.C. Rail. The

financial picture for B.C. Rail continues to improve. The members may

have seen the annual report, which I tabled yesterday in the

Legislature. I would say our financial picture has improved since

corporate restructuring in 1984. With more than 1,390 miles of main

track and assets exceeding $1.2 billion, B.C. Rail is certainly

Canada's third largest railway. It again is a well-run Crown

corporation. It has done a good job of supplying the service to those

communities in the interior, although there's always the question: is

B.C. Rail there to ensure that the industries survive at B.C. Rail's

expense, or is B.C. Rail there to be competitive on its own? We try to

keep B.C. Rail competitive on its own basis so that it doesn't have to

come to the Legislature, cap in hand, to ask for assistance. It has

always been the contention of the government to make it operate that

way — we're trying to make it operate that way — and I must say that

the staff and employees of the railway certainly look at it that way.

Last year B.C. Rail spent $116 million in goods and services, with

$86 million expended in British Columbia and a payroll of $111 million.

Our line from North Vancouver to Lillooet and Prince George carries an

average of 78,000 passengers per year. This pales when you compare it

with the B.C. Ferries run, but compared to Via Rail and other

passenger-carrying railways, it does a darned good job. I know we

dropped the ball with Nicole Parton, who went on this particular

railway and saved me having to do the trip; her critical remarks were

taken to heart by the people in the railway. Interestingly enough,

because the route is so spectacularly scenic, the number of railway

buffs and other people who travel this particular line is growing. We

have requested permission to purchase additional passenger vehicles,

which not many railroads are doing. Members will know that I've made a

number of changes to the board of directors, which more closely

reflects a change of newer members — I think it's healthy for the board

to have a new look — and we have representation from all parts of the

province.

One of the areas of the ministry which I have found most interesting

personally and have perhaps spent a little more of my time on than

others is the native affairs secretariat. As someone who has lived in

this province all his life, I must say I've learned more about our

relations with the native community since having been made the minister

responsible. I feel a little guilty about my education, and I guess the

education of the general public in terms of their relations with the

native community, because there's a lot to be learned. Things that

perhaps should be common knowledge to all of us, aren't.

We've met with more than half of the tribal councils representing

197 bands. I think we're on the lines of the first true steps toward a

cooperative venture with the native community in a number of areas.

While we disagree with them on our native land claims issue, they tell

us they are prepared to deal with us, and we are prepared to deal with

them. It shouldn't be "we" and "them," but the government with the

native community.

We have been able to make a number of what I think are substantial

improvements. As I said earlier when talking about the boards of

directors, we now have native representation on the boards of directors

of both B.C. Ferries and B.C. Rail. We have native members on the board

of the Open Learning Institute. Native individuals are being nominated

for hospitals and college boards throughout the province; a sign,

really, of much more recognition not only by the government but by

government agencies of the mainstream role that the native community

can and will play.

I am sorry that the First member for Victoria (Mr. G. Hanson) is not

here now, because one of the things that he has talked about as long as

I can remember in this House is a native language and heritage

institute. While some of the groups that we deal with still use their

language on a daily basis, others have let it slide. In many cases,

it's only the elders who have retained the language. We made an

announcement in the throne speech last year and have written to and

contacted a number of people about putting this into force. I am

getting excellent cooperation with all the people who have written in

so far, and I anticipate we will see further progress when these

estimates are next debated. Perhaps there will be further discussion on

it.

We have had a number of challenges in the culture and tourism area.

The Expo longhouse that was so successful at Expo is now in Duncan for

the Cowichan band to reassemble, and they will be reassembling it this

year. We were able to give some funding to the program that is taking

place in Prince Rupert at the Chatham site. The provincial government,

through the First Citizens' Fund, has extended a $100,000 contribution

towards that.

The amendments to the First Citizens' Fund have been authorized, and

it will make business loans to help encourage native entrepreneurship.

The fund will continue to award student bursaries and grants towards

fellowship centres.

We have also worked closely with the case of the Tahitans, who are

located at Telegraph Creek, in terms of resolution of their role in the

industrial activity which will take place at the so-called Golden Bear

mine property. Through the cooperation of the secretariat in my

ministry, there has been a great deal of good will and harmony

established not only between the company and the Tahitans but also with

other agencies.

I might point out that the secretariat is now considered a resource

source by other ministries, and we are getting good response from

ministries which wish to have background information and are starting

to use this resource in government. The credibility of the secretariat,

which was never in question, has now been greatly enhanced.

We have provided some much needed financial assistance for drug and

alcohol treatment, and we have taken a number of other steps to try to

create a more positive relationship between the native community and

the government of British Columbia. Those are my opening remarks, and I

am sure members opposite will have a number of questions.

I am joined here today by my staff, who do not need introduction,

but I will introduce them: Mr. Hogg, Mr. Flitton and Mr. Denhoff, all

of whom will ably assist me in my efforts to secure the correct funding

as apportioned by Her Majesty's budget.

MR. LOVICK: Mr. Chairman, I am not sure what protocol

dictates at this point, because I see that the Minister of Finance has

returned — and, I understand, by arrangement. So I certainly don't want

to spend some considerable time talking about this to keep you unduly,

sir. Therefore I will

[ Page 4234 ]

take your guidance, Mr. Chairman. Should I simply defer this matter?

Interjection.

MR. LOVICK: Okay, I will.

The House resumed.

The committee. having reported progress, was granted leave to sit again.

HON. MR. STRACHAN: Mr. Speaker, with leave, I call committee on Bill 17.

Leave granted.

PRIVATIZATION BENEFITS FUND ACT

The House in committee on Bill 17; Mr. Ree in the chair.

section 1.

MR. CLARK: We will have much to say about this act clause by

clause. I would like the minister at least to begin by explaining the

purpose of this act and what he expects to finally accrue in the act,

say, one year hence.

[Mr. Rabbitt in the chair.]

HON. MR. COUVELIER: The government will receive substantial

revenue from the sale of government assets under the privatization

program. The government intends that a lasting benefit be enjoyed by

future generations of British Columbians from the proceeds of these

sales. This bill will establish a perpetual fund to hold the proceeds

received from the sale of Crown assets and operations to the private

sector. The funds will be invested, and the earnings generated each

year will be transferred into general revenue.

The earnings will be used initially to reduce the provincial deficit

by offsetting the cost of interest on the public debt, and thereafter

fund general programs. There is no provision within this bill to pay

out the capital of the fund. This means that the revenue from the sale

of government assets will not be included in any specific year's

operating statement, but the income generated on the fund will continue

to be received over a period of years. The financial results of the

fund will be clearly shown in the public accounts at the end of each

fiscal year.

MR. CLARK: The minister is saying that the income from the

fund will go not to pay the operation of government but to pay only

prescribed things, like to pay down the debt or the deficit. Is that

what you're saying?

HON. MR. COUVELIER: The interest earned on the fund will be

going into the general account which will have, by virtue of its going

there, the effect of reducing interest costs and other operating costs

of government.

[4:15]

MR. CLARK: How much has accrued to date from privatization

initiatives of the government? In other words, there's been the sale of

the sign shop, etc., so I assume there is some revenue from this that

will go right into this fund. Is that correct?

HON. MR. COUVELIER: I don't have any current figure. The

member obviously is referring to some of the smaller operations that

sales agreements have been concluded on. Closing dates vary on each

one. I think the sign shop might have closed last week, but I'm not

certain of that. In any event, those minor sales wouldn't even be

registered on our statement of accounts, given that they are relatively

small, and as the hon. member knows, we deal in millions of dollars at

a time. By the end of the year, I would anticipate that this fund would

have many hundreds of millions of dollars in it.

MR, CLARK: That's interesting. Could the minister tell the House whether it's the gross proceeds or the net proceeds of the sale?

HON. MR. COUVELIER: The hon. member is probably referring to

Crown corporation privatization initiatives. He's nodding, therefore my

assumption is correct. The government will be dealing with each of

those Crown corporations in its own way. The issue is whether we keep

the Crown corporations whole. I believe it's a matter of public record

that the government says it intends to do that.

MR. CLARK: I understand that the government has said it

intends to do that — not surprisingly. The question is how they do

that. That's what we're getting to in this act. For example, the

government could put the gross proceeds from the sale into this fund

and then pay down the debt out of general revenue, which would inflate

the size of the fund, and only the interest on that gross amount would

then go into general revenue. That might look good, but it wouldn't be

reality.

On the other hand, the government might take the net proceeds from

the sale — for example, the gas division of B.C. Hydro, which might

only be less than a $100 million after you pay down the debt. That

would look smaller. I understand the political momentum that might be

there to put the gross sale in; but given that this bill limits the use

of that money to the interest on it going into general revenue, that

could have significant ramifications for the budget, it seems to me.

For example, if the gross sale price of the gas division is $600

million, say, and that all goes into the benefits fund act but then the

liability of $500 million has to be made up by government out of

general revenue, then that would cause tax increases or something like

that. You would have a large sum in the fund, but you'd have to make up

the debt through other mechanisms.

I'd appreciate it if the minister could give us slightly more of an

indication of the government's intention, because it has very

significant ramifications for public accounts in British Columbia.

HON. MR. COUVELIER: The Crown corporation sales or privatization initiatives will proceed

each in their own unique way. It is not inconceivable that the purchaser of a Crown corporation might

wish to assume the debt, in which case we're only dealing with a net figure. On the other hand,

it might be that the government's structuring of a sale might be designed to preserve debt because

the debt itself might be at such an interest rate that we make money by not paying it

[ Page 4235 ]

off. In other words, we can make more money by

lending the proceeds of the sale out at a higher interest rate than

what we're paying with the original debt on the Crown corporation made

some years ago.

The hon. member might understand then why I can't be more specific

until we receive more of the specific tenders and proposals. Let's

take, for example, the B.C. Hydro gas division. The hon. member knows

that's now out in the streets and we're anticipating receiving bids on

it. I suspect that those bids might be structured in different ways,

depending on the desires of the bidders as to how the acquisition might

fit into their own financial statements.

I'm not in a position to give the member any comfort in terms of

specifics. I can agree with the member that it could be designed in a

number of different ways. He seems to be hinting that we would use the

options for political advantage as opposed to the legitimate interests

of the bidders. I'm a little disappointed that you would ascribe such

base, crass motives to this government. After all, our performance to

date in terms of managing public funds has been exemplary and clearly

doesn't deserve the degree of cynicism that I detect in the questioner.

In any event, I have some trouble being more specific than I am, Mr.

Chairman, and I hope the hon. member understands that until we actually

conclude a deal for one of those major Crown corporations, I really

don't know how we'll wind up finally recording it.

MR. CLARK: It's not really acceptable to come in with a bill

and say: "We don't know what's going to go into it and we can't give

you any idea how we're going to structure these sales." The bill limits

the use of the capital to specific things and says that the use for

general revenue will only be interest. Therefore, it seems to me

incumbent upon the government to give us some guidelines as to how

sales — disposition of public assets — will be utilized, what the

revenue will be utilized for.

For example, can the minister tell us that some proceeds from every sale of a public asset will go into this fund?

HON. MR. COUVELIER: That would be our expectation, Mr. Chairman.

MR. CLARK: Okay. Then the question is: how do you define

privatization? The government is in the business every day, as we've

talked about it previously, of Crown land disposal, which is a form of

privatization. The B.C. Enterprise Corporation is a form of

privatization; the sale of the Songhees land is a form of

privatization. So if the minister says that a portion of every sale of

government or public assets will go into this fund, it seems to me that

we need some guidelines to tell us what the government means by that.

The government initiates a number of things every day, as government

is wont to do — any government — and inhere are sales of public assets

from time to time. Is it the minister's intention that only the revenue

from those sales which fall within the purview of the Premier's

statements regarding phase 1 of privatization, as announced by the

Premier, may go into the fund, or will there be other initiatives, as

yet unannounced, that may go?

I'll give you just one example. The courthouse was almost sold, I

gather, and that was not on the Premier's privatization announcement.

If it had been sold, would the sale of the land there go into the

Privatization Benefits Fund Act?

How all-encompassing is this act intended to be? In other words, is

this a serious piece of legislation, or is it simply to have some

high-profile, major sales of public assets go into this fund so as to

appear to be a very large fund, from which the interest can pay down

some of the deficit? I'm trying to get a handle on what the magnitude

of the fund is intended to be. Is it designed to deal with specific

projects around privatization that the government has already announced

and will announce in future in anticipation of the sales, or is it

something all-encompassing to deal with whatever may be privatized at

any time by the government?

HON. MR. COUVELIER: I'm not sure I detect a difference between the two options the hon. member put to me.

The government's decision to embark on the privatization model had

the effect of our receiving interesting proposals on a variety of

issues that were outside the "phase 1" announcement of the Premier's.

There were a number of questions there before the member sat down, but

I don't see this being necessarily limited merely to phase 1. I do

believe the government has indicated a willingness to entertain

privatization on other initiatives, and our treatment of those

initiatives in terms of reporting style will, to some extent, be

dictated by the desires of the bidders in terms of their own financing

arrangements, as I explained earlier.

I'm afraid I'm not in a position to say, nor do I think the hon.

member is reasonable in expecting me to, that we would be able to

anticipate all of the range of government operations that might in the

fullness of time turn out to be privatized; and I wouldn't want to go

on record today, Mr. Chairman, as limiting in any way the government's

freedoms in that respect.

MR. CLARK: Let me get this clear. That means that since this

act says "may," therefore it's completely discretionary. The government

may not put anything in the fund from the proceeds of a sale, or it may

designate that the proceeds of this particular sale will all go into

the fund. It's completely discretionary; there are no guidelines except

that the fund exists to be contributed to at the discretion of the

government, pending the results of any given sales, whether they've

been announced or not. Is that correct?

HON. MR. COUVELIER: With the exception, as I mentioned

earlier, that the government has the intention of keeping Crown

corporations whole. We do not envisage the likelihood, for example, of

the government of British Columbia taking the proceeds of a

privatization and leaving a Crown corporation with the burden of debt

that's properly ascribed to the assets being sold by the privatization

initiative. I can only cover off that eventuality by saying

categorically: the government has said that they will keep the Crown

corporations whole in this respect.

MR. CLARK: But the minister will confirm that the logic of

what he is saying is that the government can pay down the debt or make

whole a Crown corporation using revenue from general revenue. and put

the gross proceeds of the sale into the privatization benefits fund.

Can he confirm that?

HON. MR. COUVELIER: Providing we keep the Crown corporations

whole, that degree of flexibility, I think, is mandatory. As I've

mentioned, it may well be.... I can think of some borrowings we would

not want to pay off; we

[ Page 4236 ]

would want to keep them in place, because we can

lend out the money and earn a higher rate of interest. We can't and we

shouldn't be attempting to limit government's options.

MR. CLARK: I can understand why the government doesn't want

to limit their options. But it seems to me that we should have some

general understanding as to what is going to go into the fund. The fact

that it's so wide open leads me to believe what I earlier alluded to,

which is that the government now has the discretion to inflate the size

of the fund by putting gross proceeds in and using other means to pare

down the debt, which should have been pared down by the proceeds of the

sale. What that means, then, is that in fact we could have large asset

sales and large numbers going into the privatization benefits fund for

political purposes and nothing else.

The problem that I have with that, other than the fact that it's straight, crass politics- which we're used to in British Columbia, with Social Credit government — is that the act limits the

ability of government to use the funds for whatever purposes it wants.

On the one hand, the government says: "We want the flexibility. We want wide-open rights for the government

to decide what goes into the fund." On the other hand, it is prescribing

in legislation that only the interest from the fund will be used for operating

revenue. So the very fact that the government is not prepared to make a commitment

that only net proceeds: will go into the privatization benefits fund....

By saying: that we're not going to preclude that, what the government

is doing is leaving the door open for vastly inflating the size of the fund

and using it politically, and in fact using general revenue to pay down the

debt. It has consequences for public accounting in British Columbia. It could

have consequences in terms of tax increases or other wise, simply for political

gain. That is the problem that we have — certainly that I have — on this side

of the House; that it is wide open for manipulation. The minister has given

us no assurance that the put lose of the fund is to put net proceeds in. But

in fact it explicitly says it wants the ability to put gross proceeds from privatization

sales in the fund. It's simply not acceptable, Mr. Minister.

[4:30]

HON. MR. COUVELIER: Well, I'm disappointed, Mr. Chairman,

that it's not acceptable to the hon. member. I don't know what I'm

going to do. The sky is falling down.

The hon. member, however, hit on a very important key point, which

this government is very proud of: that we will not spend the proceeds

from privatization in current-year operating accounts. This government

is committed to the thesis that any privatization initiatives we

undertake and complete should inure to the benefit of every generation

of British Columbians forevermore, and that it's appropriate and

morally defensible and desirable that we ensure that every single

generation of British Columbians gets that benefit and that we should

not spend that benefit in the year that we sell the asset, unlike other

governments who are privatizing, as the hon. member would know, who are

using, the proceeds of privatization for the purposes of balancing

their current year.

We are saying that that is not responsible fiscal management, number

one; and number two, we are saying that that denies the benefits of

privatization to succeeding children and grandchildren of the members

in this House. We believe it is our moral responsibility to ensure that

they also benefit from the privatization decisions of this government,

so that we will not only benefit by virtue of savings in the operating

costs of the privatization initiative, but also each individual

generation of British Columbians will receive interest income from this

government's decision to privatize. We think that is appropriate and

entirely defensible, and unique in the annals of privatization being

conducted elsewhere in the world. We're very proud of that uniqueness.

MR. LOVICK: I wondered how long it was going to be before the

Minister of Finance decided that the time for rhetorical flourish had

indeed arrived. I am pleased he kept us waiting no longer.

I want to start my questioning by simply asking the minister if he

would provide us on this side of the House with some comfort, so that

we might take comfort — to use his phrase — from assurances about the

perpetuity of this fund. The ostensible purpose of the fund, as we know

and as is stated in the explanatory note, is that we want to establish

funds in perpetuity. I am wondering whether we can get any more — what

shall I call them? — specific or concrete assurances that that will

indeed be the case.

I want to explain my question, if I might, Mr. Minister, because I

think there are good reasons for putting pressure on the suggestion

that yes, indeed, this will be in perpetuity. There are two points. The

first one is that in about 1985-86, or perhaps even earlier, there was

established something called a resource revenue stabilization fund,

which was also supposed to be a fund in perpetuity. That fund

disappeared some four or five years later to pay off a particular debt.

I think there are probably a number of historical examples to suggest

that funds that were supposed to have permanent status and to exist in

perpetuity did not indeed do so. That would be my first concern and

question.

The other one — and I want to refer to the British experience that

we have encountered already with privatization — is what is called in

Britain the hospitalization program. I'm not sure if that is the

technical term, Mr. Minister, but it is certainly one that has common

currency in the U.K. What that essentially means is a sum of money

being put into a particular Crown corporation in order to improve the

economic performance of that corporation, so that it then becomes a

more likely candidate for sale.

I think a number of people — perhaps somewhat jaundiced in their

view, perhaps somewhat cynical — are looking at this particular fund as

merely a means to promote the process of privatization. In other words,

what we will do is take the sale of items X, Y and Q, and put that into

a fund, which moneys or the interest earned by those moneys can then be

used to refinance or otherwise improve the financial situation of

company P, which we also want to privatize. Of course, what happens is

that we are simply fuelling the ongoing escapade of privatization,

using the moneys that we get in the early stages.

That's the British experience. It's certainly been done; the

minister is as familiar with that as I am. Will he provide us with some

assurances that that is not the purpose of this fund?

HON. MR. COUVELIER: I can assure the hon. member that as long

as the members opposite assist in the re-election of the Vander Zalm

government, those funds will never be used for any such crass, devious

purposes. We will always ensure that they stay in place for the benefit

of all British Columbians as we see it. So to the extent that we can

welcome

[ Page

4237 ]

your assistance in that respect, we are pleased to give you that assurance.

MR. CHAIRMAN: Prior to recognizing the member, I would like

to remind members about relevancy. I have let the debate wander onto

section 2, so possibly we could tighten up the discussion with regard

section 1.

MR. LOVICK: Mr. Chairman, my apologies. I had assumed that we had let

section 1 go by. Certainly we shall.

Section 1 approved.

section 2.

MR. LOVICK: The temptation, now that we know we are on

section 2, is to simply pose the same question again. But I won't do

that to the minister. What I want to ask the minister about now is

whether he would be good enough to respond to what has become a fairly

standard argument presented by certain economists and accountants about

the privatization calculation. The government's case is that what

happens is that we sell particular assets and we earn money on those

assets. We derive income from those assets.

The assumption, however, according to some economists, is that that

is false economy. In fact, a more proper accounting would acknowledge

and recognize that the actual current value of those assets is not

being fully taken into account. What we're suggesting — I don't think

I'm saying this terribly well, and I apologize for that, Mr. Minister —

is that we who would advocate some kind of privatization program are

suggesting that value occurs only when we can sell something. What is

not taken into account is that there is clearly value within the asset

itself, prior to the point of sale.

Unfortunately, when we talk about debt and deficit reduction — so

the argument goes — we fail to take into account the full value of that

asset. I'm wondering if the minister would care to respond to that. As

I say, it is an argument that has some currency among economists.

HON. MR. COUVELIER: I can assure the hon. member that the

government has considered those points of view. Economists are famous

for their on-the-one-hand and on-the other-hand approach to issues.

Nevertheless, not to make light of the issue being raised here, the

government is cognizant that there are some services that people expect

government to provide. We are not in any way abdicating our sense of

responsibility for ensuring that the service is provided.

What the government is saying is that it isn't necessarily cast in

stone that those services need be provided by a government bureaucracy.

We think that many services can be provided more effectively, more

sensitively and more efficiently by using the private sector to provide

the service. Here again, it's an issue that is validly raised in the

House, but I can certainly say on behalf of the government that it is

not our intention to abandon the obligations of government to provide

the essential services to people. The only issue is whether we will

provide them with employees or with the entrepreneuri