1992 Legislative Session: 1st Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 15, 1992

Afternoon Sitting

Volume 4, Number 15

[ Page 2565 ]

The House met at 2:06 p.m.

Prayers.

Hon. L. Boone: Hon. Speaker, today we have special visitors in the members' gallery. I'm pleased to introduce the mayor and mayoress of the borough of King's Lynn in the United Kingdom: Councillor and Mrs. Jeffrey Tilbury. King's Lynn is the birthplace of Capt. George Vancouver. The mayor and mayoress have brought a replica of the ship's wheel of his vessel,

HMS Discovery , to the Sunshine Coast Maritime History Society for display. Please welcome them to British Columbia.

J. Weisgerber: Hon. Speaker, it's my pleasure to introduce five constituency assistants who are meeting in Victoria today: Coral Anne Holweg from Okanagan-Vernon; Sandra De Jong from Abbotsford; Susann Borth from Prince George-Omineca; Dorene Callison from Peace River North; and Donna McTavish from Peace River South. These very able and hard-working constituency assistants are meeting today in Victoria. The only difficulty is that they don't require quite as large a caucus room as they used to for their meetings. Would the House please join us in giving a warm welcome to some very hard-working constituency assistants.

Hon. G. Clark: Hon. Speaker, I have a couple of introductions today. First of all, there is someone who I have appeared before and who is a friend of the Premier: Mr. Ken Glasner and his son Daniel; I believe it is his eleventh birthday. I would ask members to make them welcome.

Also, I'm delighted to introduce today 26 grade 6 students and their teacher, Mr. A. Palmer, from the Vancouver Christian School in my constituency. I would ask the House to make them welcome.

D. Symons: Hon. Speaker, it is my pleasure to introduce to the House and the world -- particularly to my colleague from Richmond East, who is not here today -- a new constituent of hers: Dylan Robert Adam Symons, who weighed in just three hours ago at 6 pounds 15 ounces. I wish the House would make him welcome.

D. Schreck: Joining us in the gallery today is Russ Baker of Sharpe Sound Studios, an internationally known part of the movie industry located in North Vancouver. Will the House please join me in making Mr. Baker welcome.

Hon. A. Hagen: Visiting in the House today is Jack Finnbogasin, the president of the B.C. School Trustees' Association. Would the House please welcome him.

P. Ramsey: Joining us today in the gallery we have Mr. Alf Nunweiler, and his daughter Carol. Mr. Nunweiler, as many of you know, is a former member of this assembly from the riding of Fort George who served as minister of northern affairs in the government from '72 to '75. Will the House please make Mr. Nunweiler welcome.

Hon. R. Blencoe: I rise to welcome the president, once again, of the Union of B.C. Municipalities: Joyce Harder, who is meeting with me, the hon. Minister of Education and the hon. Finance minister. Will the House please make the president welcome.

Introduction of Bills

BRITISH COLUMBIA TRANSIT

AMENDMENT ACT, 1992

Hon. G. Clark presented a message from His Honour the Lieutenant-Governor: a bill intituled British Columbia Transit Amendment Act, 1992.

Hon. G. Clark: Bill 51 amends the British Columbia Transit Act to provide the Vancouver Regional Transit Commission with three new options to help deal with a local revenue shortfall projected for the '92-93 fiscal year.

Bill 51 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.

HEALTH STATUTES AMENDMENT

ACT (No. 2), 1992

Hon. E. Cull presented a message from His Honour the Lieutenant-Governor: a bill intituled Health Statutes Amendment Act (No. 2), 1992.

Hon. E. Cull: This bill amends three statutes administered by the Ministry of Health. It amends the Health Act to make minor housekeeping amendments, update obsolete references or practices and to pave the way for legislation in environmental health protection.

In addition, the amendments formally recognize the health status registry, a division of the vital statistics division in the ministry which has been operating since 1952 without any specific legislative mandate.

Amendments to the Hospital District Act will improve and streamline the procedures relating to regional hospital districts, which are established and governed by this act. The amendments have been requested by and discussed with regional hospital districts, and we're pleased to accommodate them by revising unnecessary, cumbersome and some confusing provisions in the legislation. The majority of these amendments recognize that the boards of regional hospital districts consist of the same members as the boards of the regional districts under the Municipal Act, and remove the inconsistencies.

Vancouver General Hospital is one of two hospitals which is established under the authority of its own statute, and minor amendments to this act are being made to ensure that the powers of its board are consistent with those of other hospitals and to provide for an appropriate definition of a quorum.

[ Page 2566 ]

Bill 62 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.

MUNICIPAL AFFAIRS, RECREATION

AND HOUSING STATUTES

AMENDMENT ACT (No. 2), 1992

Hon. R. Blencoe presented a message from His Honour the Lieutenant-Governor: a bill intituled Municipal Affairs, Recreation and Housing Statutes Amendment Act (No. 2), 1992.

[2:15]

Hon. R. Blencoe: Provisions in this bill represent another step in this government's modernization of legislation affecting the management of local government in the province of British Columbia. The provisions apply to the Electrical Safety Act, the Fire Services Act, the Revenue Sharing Act and the Union of British Columbia Municipalities Incorporation Act. The bill's provisions also apply to the Greater Vancouver Water District Act and the Greater Vancouver Sewerage and Drainage District Act and include a Municipalities Enabling and Validating Act amendment for the Regional District of Central Okanagan.

Bill 48 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.

ARCHITECTS AMENDMENT ACT, 1992

Hon. T. Perry presented a message from His Honour the Lieutenant-Governor: a bill intituled Architects Amendment Act, 1992.

Hon. T. Perry: I am pleased to introduce today Bill 67, Architects Amendment Act, 1992, which contains proposed amendments to the Architects Act. The purpose of these amendments is: (1) to provide the legislative authority for architects to practise in corporate form; and (2) to require architects and architectural firms to obtain certificates of practice before being authorized to practise architecture. With these amendments the Architectural Institute of B.C. will be granted the legislative authority that it now lacks to regulate and discipline incorporated practices as well as sole proprietorships and partnerships. Also included in this bill are a few miscellaneous amendments.

Bill 67 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

PULP WORKERS' LABOUR DISPUTE

G. Wilson: I'd like to take advantage of an all too rare occasion to be able to put a question to the Minister of Labour. I see that he is back from saving the country -- or attempting to. Welcome back.

I suspect that the minister feels that he has somewhat jumped from the frying pan into the fire if he comes back into British Columbia to be welcomed by a very significant strike of pulp workers. On this side of the House, we read with interest today about the minister saying that he was prepared to intervene in this dispute. I wonder if the minister could spell out specifically: what actions is the minister taking, and to what extent is the minister prepared -- I think the quote was -- "to intervene"

Hon. M. Sihota: It certainly is a pleasure to be back from the constitutional discussions. I see very little has changed. I have no idea what the opposition leader has read and what

article he is referring to, and I have no idea what he is talking about. But I can tell him this: there have been extensive and exhaustive discussions ongoing with respect to this matter, which collapsed over the weekend. It seems to me that the prudent thing at this point would be to allow the parties to reflect on what has transpired over the weekend, and we will give the parties the opportunity to do just that.

G. Wilson: I'm sure the minister is aware of what I'm talking about. I'm talking about a pulp workers' strike in British Columbia. I realize that may not have got as far as Ottawa, nevertheless we are in some dire straits here.

The Speaker: Your question, please, hon. member.

G. Wilson: My question to the minister is: given the serious financial impact that this is going to have on the B.C. economy and on the particular coastal communities that are going to be affected by this strike, at what point would the minister feel that it is important for this government to intervene and to move into that question?

Hon. M. Sihota: This government has demonstrated in the past that we will intervene at the right time, when the conditions are correct for us to intervene, after consultation with the parties, and after carefully considering what they have to say, and always mindful of the economic impact of these matters on the province.

G. Wilson: A final supplemental to the Minister of Labour. My question is whether or not the minister shares the view of the Premier, who recently, in last week's question period, said that British Columbia should be withdrawing from trade discussions in the United States and in Mexico. Given that one of the principal concerns in this pulp mill strike is the competitive position of Canadian and British Columbian pulp mills

vis-�-vis those in the United States and Mexico, I wonder if the Minister of Labour shares the opinion that we should become isolationist, remove ourselves from the table, and not look at the question of competitive advantage.

[ Page 2567 ]

The Speaker: Hon. member, I fail to see a question in that question, but I see that the Minister of Labour has risen.

Hon. M. Sihota: I'm pleased to say that the Premier and I are always of the same mind on all issues, and I'm pleased to say that we are not always of the same mind, with respect to the same issues, with the opposition.

LABOUR LAW CHANGES

L. Hanson: I too have a question for the Minister of Labour. He's very popular today. As indicated by the submission from the Business Council of B.C. to the Advisory Committee on Bill 19, most businesses are opposed to any changes that would outlaw the right of employers to carry on their business in a strike situation. Can the minister assure prospective investors today that he has not made any commitments or entered into any agreements that would compromise the independence or outcome of the process now underway to recommend changes to Bill 19?

Hon. M. Sihota: I can assure the hon. member that, unlike under the previous administration, the new labour law will not be written in the back rooms.

L. Hanson: A supplemental question. That's very interesting, because I have in my possession a letter dated April 11, 1991, from the now Minister of Labour, which promises changes to Bill 19 to accommodate secondary picketing. I quote from that letter: "...the implementation of anti-scab legislation." Can the minister advise the House if he is still committed to that promise, and if so, has he advised the business community and the Baigent committee of his position?

Hon. M. Sihota: This government is committed to a process of consultation. I have advised the business community and the commission headed by Mr. Ready of our desire to have a full and open public consultation process. We look forward to their report. They are proceeding with the development of their report on the basis of that type of consultation, mindful, of course, of the fact that there was a change in administration to one committed to arriving at labour legislation that is both fair and balanced. That was the commitment we made during the election campaign; it's the commitment that we will see completed with legislation that will be tabled in the House.

The Speaker: A final supplemental.

L. Hanson: On May 21, 1991, the then opposition leader wrote to the Canadian Paperworkers' political action committee to say an NDP government "would implement anti-scab legislation." Can the minister explain how he can reconcile that statement with his government's stated promise to fairly accept and evaluate all submissions on possible changes to Bill 19? Can he explain why investors, who are concerned about possible changes to existing labour laws, should have any confidence in this government's consultation process when the Premier himself has already promised the unions that anti-scab legislation is a done deal?

Hon. M. Sihota: I can assure the hon. member that the public will have a far greater level of confidence in our process than they did in the process that your administration embarked upon. I can also assure the hon. member that if any differences need to be reconciled, they'll be reconciled in a fashion so as to deliver legislation that puts the interests of British Columbia and British Columbians first.

WESTAR MINING LTD.

W. Hurd: A question for the Minister of Labour. I don't know whether or not the minister is aware that miners at Westar's Balmer mine are locked out. As a result of the court ruling by the Chief Justice of the Supreme Court, Westar has lost its credit arrangements. Does this mean that the Balmer mine will remain shut until at least September 30, even if the company and the unions can settle on the collective agreement?

Hon. M. Sihota: I appreciate that question. I have had the opportunity to meet with the owners and operators of the Balmer mine and also with the union involved in the dispute. I have also had the opportunity to discuss with both of those parties the implications of the court application that is being made and the effect it has on (

a) their financial status and (

b) the collective bargaining process. There's no doubt that what has transpired in court will have an effect on the collective bargaining process. It will be up to the parties in that case to decide whether or not they would allow that matter to go on until September 30. It is our preference, of course, that the matter be resolved before then.

W. Hurd: The minister may be aware that we're talking about additional workers. Besides the Balmer mine, we're talking about Roberts Bank and CP Rail. The opposition is curious. Has the minister held all these meetings since he arrived from Ottawa?

Hon. M. Sihota: I can assure the hon. member that when I come back from constitutional discussions, I have meetings with these types of parties on a very regular basis. I talk to them while I'm back east on constitutional business, taking full advantage of the three-hour time difference. In this instance, I met with the parties, in my office, some weeks ago.

The Speaker: Final supplemental, hon. member.

W. Hurd: Perhaps the minister can answer for the House a question that arose last week: how does he feel he can handle his duties and the strikes -- like the pulp dispute and this Balmer mine one -- from Ottawa?

Hon. M. Sihota: Without difficulty.

D. Jarvis: My question, for a change of pace, is to the Minister of Energy and Mines. It pertains to the

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report by the job protection commissioner, Mr. Doug Kerley, on the towns of Elkford and Sparwood. Why has the report not been released publicly? Further, why has it not been introduced to the court as part of the restructuring package presented to the Chief Justice?

Hon. A. Edwards: The job protection commissioner reports to the Minister of Economic Development. I will certainly refer the question to him.

D. Jarvis: I have a new question to the Minister of Finance. Why would the government issue what amounts to a loan guarantee of $12 million to the towns of Sparwood, Elkford and Beaver Valley for unpaid municipal taxes mere weeks before the company landed in court? Is it true that the province is now on the book for an additional $12 million for giving these communities borrowing authority?

Hon. G. Clark: On the one hand, it seems to me from the tone of the questions that the members opposite want us to give more money to Westar and not be so tough on them. On the other hand, they're now asking a question asking why we are giving loan guarantees to the communities in the region. I'll be delighted to take that question on notice and give a full and detailed answer to members of the House.

D. Jarvis: A third question to the Minister of Finance. We have estimated that Westar owes $40 million to the federal and provincial governments and Crown agencies. How much of that $40 million does the company owe the province?

Hon. G. Clark: I believe the answer is $19 million.

HEALTH MINISTRY ADVERTISEMENTS

L. Fox: My question today is to the Minister of Health. On Saturday, May 16, the minister ran this half-page ad in the Montreal

Gazette inviting job applicants for a variety of positions. Can the minister....

[2:30]

The Speaker: Order, hon. member. I must remind the hon. member that you may not bring props such as that in the House. If you could summarize as quickly as possible in your

preamble and then proceed to your main question.

L. Fox: Can the minister confirm that this ad cost the taxpayers of British Columbia over $9,000? Can she tell us how many similar ads are being placed in other papers outside this province, and how often she's running these ads?

Hon. E. Cull: We're very proud that we've been able to put over $100 million into the community health care sector this year in our health budget. That ad is designed to recruit over 700 employees to fill jobs throughout British Columbia in community health. As to the cost of the ad and the number of times it has run and the papers it has run in, I'll have to get back to you on that. I will take it on notice.

The Speaker: I do want to remind members answering questions that you can either answer the question or take it on notice. You cannot do both.

Supplemental, hon. member.

L. Fox: I'm really disappointed that the minister chose to answer the question without really answering it.

Can the minister explain why the ministry's spending so many dollars on advertising in other provinces for new employees instead of using this money for retraining the existing staff who are losing their jobs due to the government's damn-the-torpedoes approach to shifting away from hospital-based care?

Hon. E. Cull: I am pleased to inform the member that we're doing precisely what he has asked. We have been working with the major unions in the hospital sector to develop a labour adjustment strategy that will ensure that British Columbians are the first people to be considered for those jobs, particularly those who are being displaced from hospitals.

The Speaker: The bell signals the end of question period.

L. Hanson: I ask leave to table a document, hon. Speaker.

Leave granted.

Orders of the Day

Hon. G. Clark: I call Committee of Supply, both sections. In

section A will be the Ministry of Government Services, and in

section B will be the Ministry of Finance, the last vote: Crown corporations secretariat.

The House in Committee of Supply B; E. Barnes in the chair.

ESTIMATES: MINISTRY OF FINANCE

AND CORPORATE RELATIONS

On vote 37: Crown corporations secretariat, $10.

Hon. G. Clark: I'd like to introduce staff today. Brian Mann on my right is the senior financial officer; Bob Williams on my left is the secretary to the Crown corporations secretariat. Because we are on the last vote for the Crown corporations secretariat, perhaps I could briefly describe the activities of the secretariat. It may forestall some questions from members opposite. I would like to inform the House that because the leader of the third party was absent, we out of courtesy delayed the proceedings to the last vote on the Crown corporations secretariat.

The Crown corporations committee of cabinet is a committee that I chair and which consists of ministers of the Crown who have Crown corporations reporting

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directly to them. The Crown corporations secretariat really provides two main functions for government which have heretofore not been extant in British Columbia. The first is to give ministers independent policy advice on the activities of the Crown. When we came to office, and I asked the Ministry of Transportation and Highways for the staff people who scrutinize the B.C. Ferry Corporation and B.C. Transit Corporation, the answer was that there were none. There was no in-house staff in the ministries proper that reviewed the spending or policy decisions of the Crowns.

On the other hand, Treasury Board did review, obviously, capital funding and allocations by government for those Crown corporations, but that review was only predicated on not challenging the basic policy assumptions that were made. For example, if the B.C. Ferry Corporation decided that it needed ten more ferries, then Treasury Board's function was limited to reviewing how much money is actually required to build those ten ferries, rather than challenging whether or not those ferries should be built in the first place, or whether there were other cost-effective means at the government's disposal.

So Treasury Board did do a review, but the review was not on the policy question or consideration and really not even on the funding questions -- only on whether or not that much public money was required to engage in the activities which had been approved by cabinet or by the ministry responsible. By and large, that's the case. That was the situation we inherited during the transition period.

The second main area in which the secretariat assists government is in better coordination between the Crowns. There are some synergies which we hope can be developed with the expertise that exists in the Crowns -- some obvious ones. B.C. Building Corporation has some expertise in land development; other Crowns do not. So B.C. Transit, B.C. Ferries -- B.C. Hydro, maybe more appropriately -- are engaged in moving offices and in perhaps redeveloping some of their sites or selling some of their sites.

It makes sense to use the expertise that exists in the Buildings Corporation to assist with those other Crowns. That's never been done. Another obvious one that we see is Systems Corporation, which is a Crown corporation specializing in systems and computer knowledge, with very high quality staff. Again, they are not invited in to the various Crowns, by and large, to assist them in some development, perhaps, which makes sense.

Beyond just using the services of the Crowns for each other -- which is a novel approach in British Columbia -- there is also the question as to whether or not there can be some coordinated policy between the Crowns. The obvious ones are B.C. Ferries and B.C. Transit. There was no coordination between them; in fact, they were very competitive. So there is the strange situation where B.C. Transit is leasing out the SeaBus terminal for private ferries without the knowledge -- or, at least, without the support necessarily -- of B.C. Ferries.

Now there's nothing necessarily wrong with that decision, but it seems to me it's appropriate and prudent for government to have these Crowns talking among themselves and looking at ways in which they can work to minimize costs to the taxpayer. We think great efficiency gains can be made by using the Crowns in a more coordinated way with each other.

In general, just to sum up, the two main areas are: giving independent policy advice on the activities of the Crown so we have some further review of their activities independent of government proper, and secondly, coordination of the Crowns between the Crowns and within the various Crown corporations.

F. Gingell: We appreciate that the vote is only for the great sum of $10, but it does incur an expenditure of $2,053,761, all of which but $10 is going to be recovered from the Crown corporations. Can you please tell us how this is going to be split up? As a matter of fact, I might just point out, having just noticed that.... No, it's all right, carry on.

Hon. G. Clark: The total budget, as you know, is $2,053,771. We essentially tax the Crowns on the basis of their expenses, which I think is kind of clever because it helps to give some measure to the Crowns for efficiency gains.

Just to give you a sense of it, if I could for the record, you add up all of the expense statements of the Crowns and they equal 100 percent. Then you take the budget required for the year and divide it on the basis of their relative share of operating expenses for the Crowns. I think that's a fair way of dealing with making sure it's equitable. In the percentage terms: B.C. Transit, 14 percent; B.C. Buildings Corporation, 8.4 percent; B.C. Systems, 4 percent; B.C. Lotteries, 1.2 percent; ICBC, 11 percent of this $2 million; B.C. Ferries, 8 percent; B.C. Rail, 7.5 percent; 42 percent for Hydro; roughly 1 percent for B.C. Petroleum Corporation; and then obviously the smaller ones.

This is interesting because the Lottery Corporation, which generates a large revenue, is a relatively small share of the Crown corporations secretariat in keeping with the notion that we're going to charge people on the basis of the expense side of their voucher.

F. Gingell: So this is just another whammy, with the corporate capital tax, I take it, added on.

To the minister, it was interesting to listen to your description of the mandate and the mission statement. I was wondering if you could advise us what kind of staffing you anticipate in the secretariat.

Hon. G. Clark: We have essentially full-time staff. We have six people, and that may rise a couple more. Bob Williams, of course, is paid at the deputy minister level. We have a couple of people, maybe three, who would be at the assistant deputy minister level, and then staff support. Any remaining staff are consultants on an ad hoc basis. If we have a particular problem, for example B.C. Rail negotiating with northeast coal, and we want to review that question -- negotiating rates in terms of dealing with that problem -- then we hire a consultant ad hoc to give us some independent review.

[2:45]

[ Page 2570 ]

F. Gingell: So there's a basic staff of six to whom you're going to pay a total of $1,216,771 or an average of $202,000 apiece.

Hon. G. Clark: I'm sorry, I didn't understand. If it's what I think I heard, it's a ridiculous question.

As I said earlier, there will be -- when we're fully up and running -- about eight full-time staff and the rest on contract. Obviously a deputy minister's salary is about $100,000. An assistant deputy minister's is about $90,000, and this is a civil service position. This is not different from that -- unlike, for example, most Crown corporations, which pay significantly more than the public service; and unlike, say, Saskatchewan, which has a holding company model that pays commensurate with the Crowns or the holding company that they are supervising. This is not that at all. This is at British Columbia civil service public sector salary levels.

Obviously various contracts might be let from time to time -- which would be very short term but very expensive -- to try to get expertise in certain areas to review questions. For example, if we're looking at world coal markets, we may want to hire some fine talent from around the world for a week or two to review those questions. That would be possible.

F. Gingell: So do I take it that included in this $1.2 million -- for now we've gone from six to eight individuals -- there are some additional sums to pay professional fees for various consultants?

Hon. G. Clark: Yes, that's correct. I think the majority of the funding.... Oh, I see, not quite. There'd be a large share; probably 25 percent or so would be professional services, professional consulting.

F. Gingell: How would you differentiate those professional consulting services from the $400,000 you have budgeted under STOB 20 for professional services, which seems to cover that description?

Hon. G. Clark: Sorry, that's precisely what I am referring to. That's about 20 percent of the budget.

F. Gingell: Can we please go back to the $1.2 million that we're dealing with on the salaries, because I thought that was what you were saying.

Hon. G. Clark: Yes, that's correct. We will be spending some of that $1 million on salaries for contract work as well, in terms of giving the flexibility to try to deal with it. That's correct. We could staff up as is authorized here, but we've chosen to spend a bit more on the contract work than we originally planned because of the need to be flexible....

Interjection.

Hon. G. Clark: Yes, that's correct. We will be contracting services to people as they become available.

F. Gingell: If you have in your briefing book a complete, quick

summary of this salary number, it would be helpful, because we are a little confused. There's $400,000 provided for in professional services. We're now from six to eight FTEs. From the discussion of them all being paid at public service rates, one might think that the average was somewhere around $85,000. That would be $680,000 of the million dollars that is budgeted. There seems to be a lot of dollars here in addition to what you're discussing.

Hon. G. Clark: No, what we're discussing in these estimates is precisely for the budget you see before you. There has been no attempt to pay more than that. The original plan was 18 FTEs; that's what the $1 million is for. At the moment we've chosen not to fill all those positions, but rather to use some of that funding for professional contracting.

G. Wilson: We appreciate this rare glimpse at how the inner workings of this government actually transpire.

B. Jones: That's as close as you will get.

G. Wilson: I don't doubt that. An hon. member says that's as close as we will get.

Could the minister tell us, in terms of this coordination of the Crown corporations -- I don't think anybody in the Liberal opposition would disagree that we need a much greater coordination of how the Crown corporations operate -- why the government has undertaken to put this kind of money into a cabinet committee, rather than to work to a more open process? That would have allowed a legislative committee a greater degree of access into the working operations of the Crown corporations, which constitute such a significant portion of the provincial debt.

Hon. G. Clark: I don't think it's mutally exclusive to have some review of Crowns down the road by members of the House. We have certainly been able to that. Maybe I could refer you to the transition document we received from Dr. David Emerson at the time of the transition period. I'll quote you from that letter of transmittal in October, 1991: "The loose, informal and somewhat ad hoc framework for managing the relationship with Crown corporations and various public bodies has not been successful in the past."

From our perspective as government -- as a new government in particular -- it is pretty important that we get on top of the Crowns in terms of improving our efficiency, stimulating some new ideas and looking at coordination from a government point of view. In other words, we want to make sure we get our act together in order to get those operations running efficiently and working in a coordinated fashion. Perhaps down the road we would be delighted to have more input from members of the opposition.

I might say that this mechanism we have now allows you, in the House, to question me on the subject of those Crowns; that is a form of accountability that didn't exist before. I might also say that members avail themselves of the opportunity to discuss various Crowns in the estimates. I'm quite pleased to debate

[ Page 2571 ]

them. I thought the Leader of the Opposition had a very informative discussion of the B.C. Ferry Corporation at some length -- more than we've had in the House for some time. I commend him for that; I think that was a good discussion.

While there is no legislative committee, there are more avenues now for the opposition to question the activities of the Crown than there have been before. This is really a management tool more than it is a governance question at this point, in terms of accountability for members of the public.

G. Wilson: One of the concerns that we're trying to focus in on here is the question of what the minister referred to earlier in his introductory remarks: independent policy advice. Given the structure of the way the Crown corporation committee is set up, can the minister tell us exactly what constitutes independent advice on this question, insofar as the government really has full control, if not a greater hand, in the operation of Crown corporations than perhaps previously?

Hon. G. Clark: What I meant was from a government point of view, independent of the Crowns. For example, as you know, when we took office, ICBC had reviewed their rate structure and recommended certain things. Through the Crown corporations secretariat we hired Peat Marwick, in this case, to do a full review -- Mr. Ray Healey -- and work with ICBC on the various assumptions behind their initial review. That's when we started to uncover serious problems at ICBC. That would have taken us longer to do if we didn't have the secretariat, and we would have been in much deeper trouble.

The Crowns are independent of government, by and large. They act with their own staff, to some extent outside the scrutiny of Treasury Board, outside the loop so to speak. The government thought it prudent to be able to call upon an agency to give us another opinion on the activities of the Crowns. I appreciate that it is not independent in the sense that it's some external body independent of government, but from the government's point of view, it gives us a vehicle for having a second look at those activities. Obviously over time that should become increasingly less significant as we start utilizing the services of the secretariat to work with the Crowns on presentations.

For example, in ICBC's case there was a radical difference between what they told us during the transition period and what they told us after the Crown corporations secretariat's consultant review. But at the end of the day, it was ICBC management who gave us a fundamentally different recommendation after working with the secretariat. It wasn't that we got, in this case, the secretariat saying something different than ICBC; it was the consultant for the secretariat working with ICBC management through some tension and some dialogue and debate in arriving at basically the same views.

I think that's much better public policy as a result, although not very satisfactory answers, because obviously serious problems at ICBC still exist.

G. Wilson: Would the minister accept then that given the mandate that has been spelled out with respect to the Crown corporations secretariat, and given the substantial budget at its disposal...? I would say that there seems to be some freedom to move in terms of the FTEs that the minister just alluded to, if I can borrow a phrase from Peat Marwick. This freedom to move also provides a certain amount of freedom to control. I wonder if the minister might talk about the intention of the Crown corporation with respect to direct intervention on matters of financing, particularly the question of borrowing with Crown corporations.

Hon. G. Clark: If I can, I want to clarify the record. This is not a substantial budget when we're looking at reviewing the Crowns -- a $2 billion budget at B.C. Hydro. As you quite properly said earlier, the Crowns are huge entities, among the largest businesses in British Columbia, and have not been given government scrutiny in the past. By and large, they have been free agents. This budget for the Crown corporations secretariat is puny compared to the kinds of activities they are undertaking. They are engaged in reviewing the activities of the Crowns.

We have six or eight people and some consultants up against thousands of employees in those Crowns to review their activities. I'm not suggesting that it should be dramatically higher. I'm just suggesting that characterizing this as somehow dramatic or huge as compared to the activities of the Crowns is simply not accurate at all. This is a small organization designed to scrutinize these huge activities and give us some advice. They don't supplant the Crowns. They don't attempt to run the Crowns. They don't attempt to deal with all of the substantive matters.

They look at the Crowns on a project-by-project basis, at the call of the minister responsible and the committee of cabinet, to give us a review and a quick check on some of their activities and, hopefully, to impose some rigour and discipline on the Crowns themselves.

G. Wilson: I don't want to get into a semantic argument as to what constitutes huge. But outside of Treasury Board, I don't know of any other ministerial cabinet committees that have the kind of budget for FTEs that this one is being....

An Hon. Member: Treasury Board.

G. Wilson: Outside of Treasury Board was my remark.

My question has to do with respect to the authority or powers that this Crown corporations secretariat will have regarding the review of the financial operation of the Crown corporation, particularly in relation to the ability of the Crown corporation to borrow and the matter of borrowing authority. To what extent will this Crown corporations secretariat have an opportunity to review, advise and direct on that?

[3:00]

Hon. G. Clark: None really. The borrowing authority is scrutinized by Treasury Board and by the

[ Page 2572 ]

treasury branch of the ministry, in terms of the actual borrowing. The Crown corporations secretariat will help review policy questions; for example: is this money required, or are there other alternatives which might result in some efficiencies? There may be a role for the secretariat in that regard.

I might also say that the previous government -- I don't know when; it may have been under the Bennett administration -- abandoned the cost-benefit analysis in the review of capital decisions. Capital for Crown corporations, by and large, was free under the previous Social Credit administration, which may account for massive capital expenditures, sometimes irrationally chosen, and the supplanting of capital for labour. You get bigger and bigger ships and bigger and more expensive SkyTrain systems, but it precludes alternatives.

Through the secretariat we are now embarking upon bringing the routine cost-benefit analysis back into government -- because it used to exist under the previous NDP administration, and I assume for some time thereafter -- with the same kind of social discount rate and the same sensitivity analysis that might be applied to all capital decisions made by all Crowns, and perhaps by government itself.

Anybody who is familiar with the cost-benefit analysis should know that it's not the be-all and end-all. In many regards, it depends on the assumptions you use to get the answer. But at least we'll have a common set of criteria for the first time in many years so we can say: a dollar spent on capital for Ferries

vis-�-vis a dollar spent on capital for Transit vis-�-vis a dollar spent on capital in B.C. Hydro.

We're trying to bring about a common set of standards and a common evaluative framework that will apply to the Crowns. That may be one of the best examples of the secretariat's work. Instead of going in and doing the cost-benefit analysis, for example, through the secretariat, we're trying to develop common parameters for a cost-benefit analysis that the Crowns can do before they come to government for access to capital funding.

It may be that the secretariat would be utilized to review the findings or reports made by the various Crowns -- I don't know; we haven't thought that through yet. That might be an appropriate role down the road. But bringing some of that business approach to the Crowns and to the decision-making, particularly around capital, I know will save the taxpayers millions of dollars in the long run, and perhaps even in the short run. I can tell you that it has already saved the taxpayers money, as a result of the work by the secretariat.

G. Wilson: Perhaps we can try and focus a little on the functioning role of this Crown corporations secretariat with respect to policy -- I hear the minister saying it is essentially a policy directive toward the way the Crown corporation is going -- and with respect to this cost-benefit analysis, which I would suggest can be done through an independent review without the government necessarily structuring this kind of committee. To what extent, then, is the government, through its policy directives in this Crown corporations secretariat, going to start to direct the manner by which these Crown corporations operate?

If I can give you a case in point, coming back to a comment that the minister made earlier with respect to the integration of services for B.C. Ferries and B.C. Transit, if it should become the policy that that is a cost saving, to what extent will the policy that may be directed by this Crown corporations secretariat translate into actual functional changes to those two corporations with respect to what's delivered to the public?

Hon. G. Clark: It's not the intent of the secretariat to be issuing directives in that regard. To get back to the capital side, the Crown corporations secretariat will prepare a common set of cost-benefit analyses -- a common set of criteria -- and may work with the staff in the various Crowns to make sure that they are trained in applying those kinds of criteria. It'll be up to the individual Crowns, not the secretariat, to do the work, because we want them to keep their in-house capacity. We're not trying to supplant that expertise. We're trying to work and to have a common set of expertise between the Crowns.

The individual ministers responsible are still responsible for those Crowns, not the secretariat. The secretariat may demand information at the minister's request, so we want to make sure that information is provided by the Crowns to the secretariat at their request. However, they're not policy-making. The policy-making rests with the minister and the ministerial committee -- a cabinet committee. It's not an attempt.... They have no power to force functional changes. Those changes are made with the ministers responsible and the Crowns.

They are only there to collect information and to provide us with, or perhaps confirm something the Crown is doing or give us some kind of.... Perhaps, even more fundamentally, the secretariat may be useful in giving the ministers responsible lists of questions to ask about areas that we need more information on or areas we can move on. It's a resource to be used. I don't think you should confuse that with something which you seem to be implying: a bit more actual day-to-day management of the Crowns by the secretariat. That's certainly not intended.

Hon. A. Charbonneau: Could I have the leave of the House to make an introduction?

Leave granted.

Hon. A. Charbonneau: I would like to introduce a group of 55 grade 4 to 6 students from Bert Edwards Elementary school in Kamloops, and their teachers Marg Gallagher and George Smith, and some parents who are assisting as well on a two-visit trip to Victoria and then to UBC before going back to Kamloops. I would like the House members to make them welcome.

G. Wilson: With respect to the procedural operations of this secretariat, how is the operation of this secretariat maintained and recorded? Will the information that is active and operated upon -- based on whatever policy recommendation or directives for

[ Page 2573 ]

coordination -- be subject to the new Freedom of Information Act? Will that be available for public scrutiny and public review?

Hon. G. Clark: To be candid, I don't know the answer to that. My sense is that it probably would not be, in the sense that it's a cabinet committee and information given to cabinet is, by and large, confidential information. I guess you'll see in the results of the Crowns' work some influence by the secretariat -- the 24-hour sailings, which I know your seatmate there has been praising. I was delighted that he came out in favour of 24-hour sailings last week.

I know that the people of his constituency were delighted, and I made sure -- I'm making sure now, as we speak -- that they're informed of his support for 24-hour sailings. You might know that I, and I think all ministers, will give credit to the secretariat about having some influence in that regard.

You should know that the decision rests with the minister, the Crown and cabinet. This is the place for that accountability. If the secretariat recommended against 24-hour sailings to me in their policy review, that's not necessarily of any consequence, because the decision is still made by the minister, by the Crown. You can quite properly ask those questions at that time. It's like the rest of my staff who work in Treasury Board and make recommendations. I get briefing notes on every subject in the world every day.

That's not information for the public; that's information for decision-makers to make decisions with. The Crown corporations secretariat is exactly the same as all of the other public employees who give recommendations and advice to ministers. The ministers are accountable for the decisions they make and for the defence of those decisions. That's where accountability lies.

G. Wilson: The minister's response to the question of the hon. member from West Vancouver-Garibaldi on 24-hour sailings is precisely the reason that we would advocate that the information should be made public. The minister neglects to say that yes, 24-hour sailings are a good idea, but from Tsawwassen to Nanaimo, not from Horseshoe Bay to Nanaimo. That little detail was somewhat missing. We're concerned that there may be a lot of details missing in this secret cabinet committee that's going to be making such profound decisions as 24-hour sailings at the B.C. Ferry Corporation, among others.

I come back to my question with respect to these 18 FTEs that are going to be eating up the couple of million dollars that we've got tucked away. What exactly are these people hired for? What is their structure? What are their backgrounds? Are you talking about economists doing needs assessments? If you're doing cost analyses, are you talking about former and failed candidates? Just exactly who are we hiring here?

Hon. G. Clark: The member for Burnaby North is an expert in this area and was instrumental, as we all know, in the implementation of freedom-of-information legislation in this province. He advises me, and I have no reason to doubt it, that background studies -- not policy advice, but background studies -- will be available within 30 days of an announcement or the implementation of a cabinet decision. The secretariat is subject to freedom-of-information legislation and will be made available to you if it's in the form of background studies. That would probably mean a significant amount of the work done by the secretariat. It is certainly not exempt from freedom-of-information legislation.

For the House's information, I'll just give you background on all of the individuals who are working for the secretariat. Richard Bridge has a BA and a law degree and is a member of the B.C. bar. He worked for Fenton and Company. Members who were here in a previous Parliament may remember that he was an intern at one point early on, a few years back. He is a first-class individual, was a finalist for the B.C. Rhodes scholarship and is working full time for the secretariat.

Sam Bawlf is doing some work for the secretariat. I think many of you know him. He has a BA from UBC, with graduate work in urban economics. He is an honourable member of the Architectural Institute of B.C. The Old Town of Victoria, Market Square and the like are parts of his development. He is the former chair of the Ferry corporation, a former member of cabinet, a former member of B.C. Harbours Corporation and is doing some work particularly with respect to the B.C. Buildings Corporation, land use and development in Victoria.

I was not questioned by the member opposite about the Peat Marwick report and the use of space. Mr. Bawlf assisted the B.C. Buildings Corporation in the development of a Victoria space plan, which is the first of its kind and well worthwhile.

Alastair Crerar is working at the secretariat full time. He has a BA and MA in economics and geography, is the author of a list of articles, as many of you may know, and he was elected a Fellow of the Canadian Institute of Planners. He is a former CEO of the Environment Council of Alberta, a former director of the Environment and Land Use Committee of cabinet in British Columbia, and has 40 years' experience in land use planning in the country, most recently working internationally.

Robyn Allan is currently working at ICBC, but, as you know, was on contract with the secretariat, and I hope she will be back working for the secretariat in the not-too-distant future. She has a BA and MA in economics and history, is former executive director of VanCity Community Foundation and former senior economist at B.C. Central Credit Union, a former lecturer at Kwantlen College and the University of Regina, former manager, financial planning and budget controls, Saskatchewan Government Insurance Corporation, and, obviously, a long list of publications in economics as well.

Bruce Duncan is working for the secretariat. Mr. Duncan brings us 15 years of professional economic and public policy experience. He is the full-time senior policy adviser to the secretariat. He is a public employee of long standing in British Columbia, with a BA and MA in resource economics and public finance. He was a senior policy adviser, B.C. Hydro, under, I believe, the Bennett administration, economic adviser

[ Page 2574 ]

on oil tax policy for the board of inland revenue, United Kingdom, manager of resource development ministries, treasury board staff, and most recently a senior resource economist, Ministry of Economic Development. We stole him from the Ministry of Economic Development.

Mr. Len DeVito was on a short term contract looking at ICBC. He has 19 years of insurance experience. He is currently the chair of ICBC, is former comptroller of executive reporting integration, ICBC, former comptroller of insurance operations data, ICBC, former manager of internal audit at ICBC, and prior to the advent of ICBC a former regional services manager of Allstate Insurance.

Harold Halvorson: I'm delighted that Mr. Halvorson has come to give us some help at the secretariat. Mr. Halvorson has a PhD in metallurgical engineering, an MSc and a BA from UBC; he has a PEng as well, and has lots of publications. Many of you may remember that. He's been in private practice since 1974. Dr. Halvorson used to work for Alcan, Cominco, and B.C. Research. Mr. Halvorson made a noted study for the southeast B.C. mayors, recommending against the northeast coal project. Most of his work has proven to be prescient, I think it's fair to say, and he is a very interesting fellow.

He most recently worked for Mr. Jack Davis, the Ministry of Energy, Mines and Petroleum Resources, on a consulting basis; he is a private sector consultant and is working on a variety of projects right now for the secretariat.

[3:15]

Eva Hague: she is basically an analyst. Career highlights: she worked in Stockholm -- I can't pronounce the words for that. She has a BCom from the University of Alberta and an MBA from the University of Western Ontario. She has lots of international consulting expertise in telecommunications, chemical and utilities strategic planning and analysis, and her main area of interest at the moment at the secretariat is B.C. Hydro.

Allen Kanerva has a BA and a master's from Canadian Forces staff school. He's a helicopter pilot with Canadian Forces. He has expertise in business plan writing and research. He was contracted to do some work for us with a variety of Crown corporations. He has a short-term contract.

Chris Main is working for the secretariat. He brings ten years of research and consulting experience with provincial Crown corporations, line ministries and government services; again, someone we stole from the main staff.

An Hon. Member: Borrowed.

Hon. G. Clark: We borrowed -- excuse me. He has a BA in history, a diploma in education, and an MPA from the University of Victoria. He has done work on a project basis in government for the previous administration's Royal Commission on Education. He worked on the previous government's Royal Commission on Health Care and Costs, originally was out of Treasury Board, I believe, and worked with Treasury Board staff. He is doing a variety of tasks for us, including, I think, our accounting work.

Ken Peterson has done some work for the secretariat. I'm giving you all of the contractors we've hired to date, including people who are working full-time as well as contractors. I am delighted that Ken has decided to come and give us some of the value of his expertise. He has a BA and an MA in economics; he is associate professional economist of B.C., adjunct professor at SFU and a former director of planning at B.C. Hydro. In many respects, I think, he was the architect of the Power Smart project. Maybe I shouldn't give him more credit than he deserves, but he was a senior staff person at B.C.

Hydro for many years; he left just a few years ago. His particular expertise is in resource economics and in environmental and energy policy and planning issues, and he's giving us assistance with the B.C. Hydro review.

Marvin Shaffer works for the secretariat, and he's just back, I think, from Tanzania. We're delighted to enter into a contract with Mr. Shaffer. He has a BA in economics from McGill and an MA and PhD in economics from UBC; senior economist with the B.C. Energy Commission; obviously Canada Council fellowships, Woodrow Wilson fellowships. Dr. Shaffer has 15 years of professional experience in evaluation and policy analysis. I may say that he is in fact the key staff person doing the cost-benefit analysis review that I've just mentioned in terms of trying to provide professional standards to all the Crowns.

Ron Stromberg is employed by the secretariat. He has a BSc in civil engineering and a diploma in planning and has lots of experience in the transportation sector. He's been reviewing some of the work at B.C. Transit.

Sam Ahad is employed by the secretariat. Mr. Ahad has 22 years of engineering and project planning experience in the private and public sector. Currently he is a private sector consultant; BSc in engineering at McMaster University, graduate school at the University of Calgary and a PEng doctorate -- in engineering -- from Ontario.

Obviously, many of you are familiar with Mr. Williams's background, both politically and professionally. He has a master's degree in planning from UBC and much work in that regard.

G. Wilson: I confess I was almost sorry I asked. It's certainly a very high-powered group, and it seems like an eminently well-qualified group of people in their own field of expertise.

The question would be: with all of this high power that you've got and all of this obvious strength of purpose with respect to their own particular areas of expertise, how is this being structured with respect to the work they do? The simple question is: now that you've got all these people assembled, what are they all doing, and to what extent are they being sectored into various Crown corporations -- Hydro, B.C. Rail possibly, ICBC, B.C. Ferries, whatever?

Hon. G. Clark: Well, I tried to give you a sense of where they've been currently working, but the short answer is: the Crown Corporations Committee of

[ Page 2575 ]

cabinet meets weekly, and we discuss the work of the secretariat, and various ministers may bring forward issues which they would like review undertaken on, and within the budget and staff time available the cabinet committee makes those decisions.

I might tell you that ICBC has taken up a disproportionate amount of the work because of the mess that was left behind by the previous government. There are serious problems at ICBC, which are going to take an enormous amount of effort to fix. It is a very challenging part of our undertaking.

In fairness, obviously we are now just reviewing various Crowns in terms of their abilities to deal with some of the problems I mentioned earlier, but ministers may, from time to time.... B.C. Rail, for example, is in negotiations with northeast coal producers. The previous government had, I think, an appalling position with respect to dealing with negotiating in a tough way to protect the interests of the Crown. The minister responsible for highways and transportation asked for some review by the secretariat. We engaged people of the calibre of Mr. Halvorson for that review.

As a result of the work of the secretariat and the negotiation process that took place after we dismissed the former Socred MLA who chaired the board, we saved the taxpayers, potentially, tens of millions of dollars. For the first time, there is now an upside to that. If the price rises, then we can share in the value of those proceeds. That's a concrete example of the kind of work done by the secretariat at the request of the minister. The minister takes it to the cabinet committee and asks for it. We consult with the secretary, Mr. Williams, to see whether we can find the resources, because there is a fixed budget and we can't accommodate everybody's request.

We are, and will be, engaged in a more precise, longer-range plan. We now have new boards in place with a variety of expertise so the secretariat can, we hope, work with the boards. We can develop more of a long-range business plan for the secretariat. By and large it's been crisis intervention more than anything else at the moment, trying to deal with the difficult situation the previous government left the people of B.C.

G. Wilson: How much influence did the secretariat have in the appointment of boards? Was there any direct recruitment that took place as a result of this commission with respect to the eventual appointees who were successful?

Hon. G. Clark: The secretariat and the secretary had virtually no role other than to.... There was some suggestion of names. As you know, we now have a very elaborate process -- I won't say too elaborate -- of review and consultation to try to fill positions. I believe members opposite were consulted on some of the appointments and have seen the benefits of that. Gordon Gibson Jr. was appointed to one of the boards through that process. In the same way that members of the opposition can feed names in for review, the Crown corporations secretariat secretary can feed names in for review.

G. Wilson: I'm not sure that I would say consultation was exactly the process used in the formulation of any names coming from this side. Nevertheless, in response to that question on the matter of the ICBC board, if the secretariat felt there were suitable people for the appointments to be made, the secretary could make direct recommendations through to the minister for the appointments to those positions. Is that pretty much how it works?

Hon. G. Clark: Well, the secretary could make recommendations to the minister, but the minister has to put them through the same process -- in other words, the competition process through Mr. Pollard's office now, in terms of reviewing all of the appointments. It's just a matter of presenting and collecting talented British Columbians from across British Columbia. Only in the sense that any other citizen can nominate someone for a board, as you have, as your seatmate has, or as I have letters from people recommending....

I've seen letters from the Leader of the Opposition, I think, and other members of the opposition recommending someone for a board. I have a letter from the member for Saanich North and the Islands recommending from that geographic region, and I'd be delighted to have names from that member that we would feed into the system for review as a vacancy occurs. The member makes a good point about the southern Gulf Islands, and in that respect the secretary or others can make the same representation.

G. Wilson: Full marks for a nice effort there from the minister. Any letter you've had from the Leader of the Opposition certainly would outline our policy, which is for a public process in the selection of board members. Nevertheless, the question comes back: if in fact....

Interjection.

G. Wilson: I certainly could. I'm sure that the price is too high for many members of British Columbia business and industry. The signing of the NDP card is just too much for them to bear.

Back to the point at hand, if in fact the commission has the ability to recommend the appointment and hiring, I wonder what role, if any, the commission would have with respect to the firing of board members, board chairs, from Crown corporations.

Hon. G. Clark: I assume you mean the secretariat can recommend people. No, the decision, as you should know, is essentially a legal decision. The Lieutenant-Governor-in-Council makes certain decisions. The board of directors has certain powers that are specified in law, and there's no intent whatsoever of changing the legislation governing the Crowns at this time.

G. Wilson: I have one more question, and then I'd happy to hand it back to my colleagues who might want to get into specifics on the financing of this new venture that we have in the province. It has to do with the functional role of this secretariat

vis-�-vis the general

[ Page 2576 ]

direction of the Crowns. If the minister could outline whether or not I have an accurate understanding, it would almost seem this coordinating committee is a structure or level of authority between the minister and the Crown corporations that can provide two specific kinds of directions. One is a question of policy in the direction that the Crown corporations ought to be going, and the second is a watchdog role to make sure that the Crown corporations are functioning properly.

If I have those two correct in my mind, then I wonder if the minister might tell us to what extent the directives from the secretariat will be able to shape the manner by which these Crown corporations will operate over the next several years with respect to proposed integrations that might be taking place or proposed new directions with respect to ferries and fast-ferry service -- those kinds of things. To what extent will this become a driving agency rather than simply a policy and policing agency?

Hon. G. Clark: An excellent question. I would say, first of all, that it's important to distinguish that the minister responsible is still the minister responsible. There's been no diminution of that ministerial accountability, so questions on B.C. Rail go to the minister responsible for B.C. Rail. There's no level in between. We try to have a collegial approach so that the secretariat can give advice to that committee of cabinet and the committee of cabinet can give advice to the minister. Believe me, that advice is not always taken.

Ultimately, as you should know as well, the cabinet committee reports to cabinet every week in terms of the decisions or recommendations coming out of that cabinet committee with advice guided by the secretariat. There's no attempt to force.... We haven't come across this yet, and I don't think it's contemplated -- that a minister responsible for a particular Crown corporation will have that right fettered by the committee of cabinet or the secretariat. It's more of a collegial approach to those questions.

[3:30]

Will it become a driving agency for change? I think that may well be true, but not in the sense that the secretariat has any powers to force decision-making on the Crowns -- not at all. Only in the sense of trying to work with Crowns and get some creativity generated in terms of some of the options. That's my hope. I don't want to give the secretariat or myself too much credit, but I think the ferry decision had some impetus from the minister and the secretariat. That decision and the excellent work done was by staff at B.C. Ferries. They've done a superb job. But some ideas generated and some options available for those Crowns generated by the secretariat.... That's just a small example.

B.C. Rail management did a superb job. It was B.C. Rail management that did that job, not the secretariat; but it was the secretariat that gave some advice to the minister and the cabinet committee. They said: "Hey, wait a minute. We're not taking a tough position. There are some options here that should perhaps be explored." It was after giving that feedback to the management that they said: "We think you're right. We think we can drive a better deal than we may have done in the past." So the strategy changed.

It may have been recommended by the secretariat, it may have been recommended by that committee of cabinet, but the follow-through and all of the work was done by that Crown corporation.

That's the way it should be; that's the way it will stay. We have no intention of supplanting the management of the Crowns or ministerial accountability. It's more of an information-gathering and policy discussion where we can help focus the activities of the Crown.

G. Wilson: Would the minister not agree that in using this kind of structure it's very much like saying to the administration of the Crown corporations that the reward for doing it our way is survival, and that if you don't, you are going to not only buck the minister but buck what would seem to be a pretty powerfully appointed secretariat that has some clear ideas and direction? They are advising government with respect to policy. It's almost like saying that your reward is your own survival.

Hon. G. Clark: I understand what you're saying, but I think that that comment does a disservice to the people who work in those Crowns. Take the B.C. Rail example: they have a first-class CEO recruited by the previous government. Believe me, if that individual or staff did not agree with the direction that the secretariat, the committee or the cabinet minister recommended, I don't think they would simply follow along with that recommendation. These are strong individuals running large corporations who have lots of expertise at their disposal. They debate these issues. That's as it should be.

I think it's fair to say that there is some healthy debate -- not tension -- that takes place between the Crowns, and the minister receives some policy advice from the secretariat. That's healthy. In fairness, I think all of the Crowns really act that way; they don't acquiesce to the decision-making. They have their own staff, their own ideas -- high-quality staff, at that -- and they debate them at great length. Not all of the recommendations or advice that we receive are acted upon.

J. Weisgerber: It's an interesting point. I'd like to talk for a few minutes about the B.C. Rail decision as it applies to northeast coal. I'm of the opinion that the decision to hold out for some upside benefits of the agreement came long before the election.

Interjections.

J. Weisgerber: If you would like to look back in the minutes of the B.C. Rail board, you will find a decision taken by the board prior to September to try and tie the upside benefits that might come further down the road to the concessions that were being asked for as part of the Quintette restructuring. For the secretariat to claim that it somehow came up with this notion is total nonsense. It was a decision that was developed by the management and board of B.C. Rail. I would suggest it had absolutely nothing to do with the secretariat.

[ Page 2577 ]

Hon. G. Clark: I think it's hard to dignify that with an answer. That is a pathetic approach by the member opposite. He knows better. It was a team review after the election with the Ministry of Energy, Mines and Petroleum Resources, the Economic Development ministry, the secretariat and B.C. Rail. It was obstructionism from the board and from a former Socred MLA, who tried to give away the public interest in that regard. It was only by the activities of this administration that we drove a deal.

It was over the wishes of the previous administration, who were prepared time and time again to give away the store, to not look after the public interest, to use these Crowns as their own little fiefdoms, their own little political objectives, without the kind of business sense or tough approach to protect the public interest that we see in all the ministries of government and all the Crowns.

I think that if it wasn't for the activities of the ministries' personnel -- I have talked about the minister responsible and the secretariat and the management of the Crowns -- we would have lost millions of dollars of taxpayers' money. I'm surprised the member opposite can stand there with a straight face and even pretend that the decision was made prior to the change of government.

J. Weisgerber: Obviously I hit a bit of a nerve. It's kind of nice to see that that happens once in a while.

The reality is that there will be many opportunities, I am sure, to talk to the management of B.C. Rail -- a very capable crew -- who were taking exactly the same approach of recovering the upside benefits on the proposal that related to the barging on Williston Lake. So it wasn't a brand-new idea at B.C. Rail, nor was it a brand-new idea for the board.

I would assume, at least, that the chairmen of the Crown boards report to the minister responsible. I am wondering if the presidents and chief executive officers report only to the chairman, or do they report to Mr. Williams, or do they report to the minister? How does that reporting relationship work with the presidents and chief executive officers at the Crowns?

Hon. G. Clark: They report to the chair of the board as well as the minister responsible. There is no reporting relationship to the secretariat nor is there contemplated to be one. The secretariat provides a source of information for ministers and boards. The CEOs and presidents are not expected to report in any way to the secretary, to the Crown Corporations Committee of cabinet or to anybody who works there. They are expected to cooperate with the secretary or any of the staff of the secretariat in the gathering of information so that we can work from a common fact base.

J. Weisgerber: Perhaps the minister could tell us when the secretary attends board meetings. Does he go there at the behest of the minister, or is he there acting on behalf of the secretariat?

Hon. G. Clark: The secretary has attended two board meetings to date -- B.C. Hydro last week and B.C. Rail previously -- both at the request of the respective ministers.

J. Weisgerber: It's interesting. From the number of calls that I got I would have thought he had been to at least a half a dozen of them. He seemed to have made an impression on some of the directors who are no longer there. I was of the impression that he had attended previous Hydro board meetings. I'm well aware of the meeting that he had with B.C. Rail. It's my understanding that the secretary would only attend board meetings on behalf of the minister and would be bringing government advice on behalf of the minister to the board.

Hon. G. Clark: The secretary has no voice nor vote at board meetings; although I am advised that the secretary did attend a B.C. Rail board meeting before we got rid of the Socreds on that board. He did speak once at that meeting. It's our hope that the Crown corporations secretariat can play a role in training board members and working with board members in terms of providing that kind of expertise.

But it's important that it be clear here that members of the secretariat, if they're invited to attend a board meeting by the minister responsible, are there only as resource persons for the board, and are not participating in the discussions or the deliberations. They're there to assist the board in that capacity.

J. Weisgerber: I understand, in the recommendations that the secretary made to the board and in some of the responses that the board members made, that the secretary became somewhat flushed. I suppose that might have been that he was unhappy with the message he was going to take back to the minister. But it's nice to hear that that relationship has kept itself pure, and that in fact the secretary is not bringing any messages from anyone other than perhaps the minister responsible.

I was pleased to hear that the secretariat had adopted the contracting model, because I think that even though it's received a lot of criticism by this government -- or the previous government from this government -- it was a fairly effective way of dealing with issues. Certainly someone as much a capitalist and free-enterpriser as the secretary was quick to grasp that. My congratulations to him.

I'm wondering, of the very well qualified people that the minister listed, how many are on a per diem contract and how many -- if any -- get more than the $600-a-day figure that's become a bit of a number and a point of reference in this House.

Hon. G. Clark: Many of them are on per diem, as is usually the professional contract case, but I think a couple of them are on an annual contract. It appears that the vast majority of the contractors make less than the $300 a day, and certainly less than $400 a day. It's hard to break it out. As we discussed, Mr. Bridge is actually on an annual contract at what looks like $242 a day, which is about $63,000 a year. Mr. Stromberg is on an annual contract, and it looks like $225 a day. Mr.Bawlf is on a $305-a-day contract, not for the full

[ Page 2578 ]

year. There are some higher ones. Ken Peterson is actually $735 a day, for a short-term contract.

These rates of pay are not determined by the government, by and large. Mr. Peterson is a well-known professional economist who does business for a variety of agencies, and that's the prevailing rate. That's the rate, I might say, that the previous government paid these individuals when they worked for them. As I mentioned earlier, many of them have done consulting work for the previous administration. Harold Halvorson, for example, worked for Mr. Davis. I remember discussing that with him at the time. Mr.

Halvorson is at $370 a day, and that's lower than he should be paid, and lower than I think he was paid by the previous government. But we hope he will working for the secretariat for the full year, because we want to tap his expertise.

J. Weisgerber: If I understand correctly, only one of the contractors that you have working for the secretariat earns $600 a day or more.

Hon. G. Clark: It looks like three. Marvin Shaffer is higher, but that may change, because we're hoping that Mr. Shaffer will be at an annual rate at an assistant deputy minister's level. He was on a previous contract before he went to teach in Tanzania for some time. When he comes back I assume that will be lower.

[3:45]

Mr. Brad Bond, who was.... I didn't mention his name earlier -- sorry. He worked for only two weeks. Mr. Bond was in charge of work for Mr. Peter Toigo as the chief operating officer for the conglomerate that is Mr. Toigo. He's an East End guy who impressed us with his business acumen. He has since left Mr. Toigo's employ. We did hire him on a brief contract. The per diem was higher, but it was only for two weeks.

J. Weisgerber: Could the minister advise whether Tom Gunton, Bill King or Bob Adams have ever had contracts with the secretariat?

Hon. G. Clark: No, they did not. Bill King worked for the government personnel services division in my ministry on contract at about $300 per day. Mr. Tom Gunton worked for the cabinet planning secretariat. I believe Bob Adams worked for the cabinet secretariat, as well, for a brief period.

Tom Gunton, as you may know, worked for the previous administration -- or at least for the Forest Resources Commission. He has done consulting work for governments across the country including the previous Social Credit administration -- at least through the commission, if not for the government proper. Mr. Adams is a Rhodes scholar and has a PhD in economics. He is doing some work, as I understand it, putting together the economic and trade summit that the Premier is hosting this coming week. Mr. King, as you know, has a lot of experience in labour relations. He did some work for me through the government personnel services division of my ministry.

J. Weisgerber: The minister said a couple of times in these debates that the previous government provided no direction to the Crowns. Having sat on the board of two Crown corporations and having been in cabinet for about three and a half years, it seems to me that that is not accurate.

First of all, let's look at B.C. Ferries. The minister has made comments a number of times. He complained in the House last week that the B.C. Ferries board had been directed not to involve themselves in the fast-ferry business. Then he complained that the government gave the Crowns no direction. I know very well that B.C. Ferries came to cabinet with the superferries proposals, and that those were debated at length in cabinet. Changes in routing were brought to cabinet and approved, and changes in fares and rates were regularly brought forward to cabinet.

It also seems to me that B.C. Hydro received a fair amount of influence, and there was a fair amount of interaction between Jack Davis and the board and chairman at Hydro. I could go on to look at B.C. Rail. There were a number of areas of influence by ministers. I agree that the amount of influence varied from minister to minister. If you're looking for a concession, I would certainly concede that.

For example, let's talk about the B.C. Trade Development Corporation. For the first time that I'm aware of, that very small corporation has a full-time president and CEO and also has a full-time chairman of the board, very few employees -- I think less than 60....

Interjection.

J. Weisgerber: One hundred and twenty. Perhaps. A very, very small corporation. In contrast to that, the chairman at B.C. Rail, up until he was relieved at least, received I believe $3,000 a year and $300 a day for those days he attended board meetings. Contrast that with the current chairman at the B.C. Trade Development Corporation. It's very, very difficult for me to believe that on top of all that management and influence there needs to be a secretariat to help them straighten out their business. I'm more interested, I suppose, in the relationship of the corporation, for example, to B.C. Hydro and how this secretariat would see itself in giving advice to Hydro on various issues.

Hon. G. Clark: Some kind of a non sequitur there -- you made a speech about full-time chairs, and then you asked the question about Hydro. Let me just deal with the first part first. You're right, when we came to office, there were no criteria for whether there would be full-time chairs or part-time chairs. For example, B.C. Transit had a full-time chair. B.C. Hydro didn't, but they used to. I think Chester Johnson was a full-time chair. I may be wrong, but I think there used to be a full-time chair at Hydro and a full-time CEO, or at least chief operating officer. And there isn't a review. So they're not consistent, I grant you that.

But also what's not consistent.... I published the information earlier this year. Mr. McElligott makes $229,000 a year, plus bonuses, and he runs a large corporation. At B.C. Hydro, which is of course a huge

[ Page 2579 ]

corporation, I think the CEO makes about $180,000 or $190,000, added up. And then Mr. Rhodes makes $110,000, I think, as CEO. There isn't a lot of coordination. I guess that is the way it has developed. We are trying to review that through the Korbin commission and elsewhere, in terms of rationalizing that.

But with the B.C. Trade Corporation, I think it's fair to say that the appropriate place to ask these questions really is with the Premier. The Premier took the B.C. Trade Corporation because of the government's commitment and the Premier's commitment to trade development. It was decided at that time to upgrade the status of the B.C. Trade Corporation and dramatically improve its visibility in the community. A decision was made at that time to have a full-time chair. That's not unusual when you look around the various Crowns, but I'll grant you that there's no policy regarding full-time or part-time chairs.

On the question of B.C. Hydro, the minister responsible is the Minister of Labour. At this point the secretariat is reviewing. There are a lot of issues at B.C. Hydro, as the member knows, which the government has to come to grips with. Obviously there has to be a close working relationship with Energy, Mines and Petroleum Resources staff on issues like downstream benefits, independent power producers, export of power -- issues around those questions. The secretariat can be available to the Minister of Energy and the Minister of Labour to assist in review in that regard.

I think, frankly, if you do have questions specifically on B.C. Hydro -- I don't mean this as a cop-out -- you should really address them to the Minister of Labour, whose estimates come right after this.

J. Weisgerber: The questions of the downstream benefits and the other issues that the minister raises are appropriate ones. But we just recently approved an Energy Council in this House, which I assumed would be the guys who would be looking into those kinds of weighty questions.

Interjection.

J. Weisgerber: Well, it's an interesting topic. I supported the notion of an Energy Council staffed with some people who had some ability and some knowledge in the energy field. I certainly didn't support the notion of an Energy Council made up of a number of individuals whose greatest ability was to travel around the province and listen to the wishes of British Columbians. That's a worthy exercise, but it's not going to help this province develop a coherent energy policy.

There's a good argument to be made for establishing or re-examining the energy policy in this province. In the short time that I was in the ministry, it was one of the things that I certainly would have liked to have had the time to pursue in a bit more detail. Of course, certain events got in the way of that happening, and those things have a way of doing that. But there's always the next go-around. The way things go, there will probably still be lots to be done on developing an energy policy. We'll have had a few hundred thousand hours of public input to a very well-qualified Energy Council, so the job will be much easier then.

Getting back to the function of the secretariat, could the minister tell us if a written mission statement or direction has been made public? If it has not been tabled, would he table it?

Hon. G. Clark: That's a good question. There hasn't been one published, but I anticipate that one will be before long. We obviously have a working document on a mission statement for the secretariat. We are, as you can imagine, going through the exercise to get the reporting relationships clear. It is evolving somewhat. I think you can expect that we will publish one in the reasonably near future.

J. Weisgerber: Is it the intention of the ministry to have a separate annual report tabled for the secretariat? The only previous one that I can think of was the native affairs secretariat, and I believe that it did table an annual report. I'm wondering if we can look forward to that document.

Hon. G. Clark: It hasn't been determined. I don't believe it's contemplated. You're right that other cabinet committees don't. But in terms of increasing accountability, it's not a bad idea, and I'll take it under advisement.

J. Weisgerber: The difference is clear: it's a secretariat as opposed to a cabinet committee. I don't know that there would be any other reporting mechanism. It would seem to me to be an appropriate thing to do.

Following that, I was wondering what legal authority the secretariat has. Is it a Crown corporation, or is it government? When the secretariat does business, what kind of legal entity does it do business as?

Hon. G. Clark: It's really just an arm of government. It has no special power; it just operates the same way that any branch of government would. The mechanism for paying out is a common one in government: it's a $10 vote this year. That's a recoverable vote. Last year it was a

section 22 account under the Financial Administration Act, which is opened routinely to pay in so you can be paid out. For the $10 vote, the accountability is here and in the vote description. So essentially it has absolutely no special power, and none is contemplated at this time.

J. Weisgerber: The minister explained how the contributions were assessed. Are the contributions from the Crowns paid to the secretariat, or are they paid through the Ministry of Finance?

Hon. G. Clark: The cheques are payable to the Minister of Finance in the same way they are elsewhere. They come into the Ministry of Finance and are managed by my staff the same way other branches of the Ministry of Finance are handled.

[ Page 2580 ]

J. Weisgerber: I'm curious then why you simply wouldn't have this as a branch of the Ministry of Finance and fund it through the estimates and put a levy -- if that's what you wanted to do -- on the Crown corporations to pay for it. Why is this other mechanism used?

Hon. G. Clark: There are a variety of vehicles for government. This is a fully cost-recovered vote. We'd like to show that in the budget.

Perhaps the member knows from his experience in government that in the budgeting process we only look at the expenditure side of the equation and revenues go into a great big pot. We wanted to have this separate and distinct where the costs paid for by the Crowns, on the basis of expenses, were remitted and fully cost-recovered so that the budget is still clear.

[4:00]

The Crown corporations know the money is going to service this agency. I think this is true by and large of government. If the Crowns are simply paying the Minister of Finance and it was going into the general revenue pot, there would be a great temptation on the part of the Minister of Finance to keep a piece of that money. In fact, that has been the experience historically, regardless of government. What we tried to do here is keep it as a cost-recovered vote so that the Crowns know exactly what they're paying in, and they know it's being spent on areas which benefit them in terms of efficiency gains that might accrue.

J. Weisgerber: One easy way to find out how much they benefit from it and how much they appreciate the benefit that they get would be to make their contribution voluntary. I suppose you would then have a measure of the benefit.

I'm curious about the model that is set up now. It is set at a $2 million budget. It's reminiscent of the eight regions and their initial $1 million budget. There seems to be some interesting similarities here, insomuch as the staffing at that level would indicate that the secretariat won't spend the $1.25 million that's allocated for salaries and contracts unless there is a significant upswing, as the opposition Finance critic questioned. I'm curious. Has the money all been paid in advance for the year? Is it a monthly billing that goes out?

Hon. G. Clark: We must recover what we spend. If there is any extra money, obviously it would go into general revenue. There is no mechanism for carrying it forward.

I disagree with you. The nature of this secretariat is not to have a big bureaucracy but to use consultants and contractors on a project-by-project basis. That gives more flexibility. It was never an intent to have a huge staff. By way of comparison, the Saskatchewan Crown Management Board, which is a holding-company model that is a little more elaborate than we're talking about here, supervises 14 Crown corporations and four joint-venture corporations that have a total of $7 billion in invested assets. This is significantly less than British Columbia.

This is in Saskatchewan, which is having a very difficult time, as you know. The budget in Saskatchewan in 1991 was $4.9 million with 35 full-time staff and, in addition, relied heavily on outside consultants for specific issues.

Just to give you a sense of how lean this operation is and how it's intended to ensure that we have the flexibility, while we originally thought that we would have a larger FTE count -- which is by and large fictitious anyway; the real question is how much money you're spending -- we've decided to employ consultants dealing with specific expertise and working in the private sector. I'm very pleased that we do have a small core group of public employees who have come over from the public sector. These people worked in the various line ministries.

I'm not sure if there are any that you are familiar with in that list. I'm hopeful that over the course of the next year we may manage to convince a couple more senior public employees, senior staff people, to give us that advice.

We want to make sure that this is part of the public service, that this is an agency with good links throughout the government, in a non-partisan sense, to ensure that Energy, Mines and Petroleum Resources and Economic Development and underlying agencies have good working relationships with the Crowns. The disadvantage of contractors sometimes is that you're using them on a project-by-project basis. That's important, especially when you're dealing with crisis intervention. It's also important to have a core group of employees who work with the line ministries and in most cases come from the line ministries. We can make sure that it's part of the government proper.

J. Weisgerber: I don't know how long the corporation in Saskatchewan has been in existence. I suspect that if we're back here three years from now, it will be interesting to see how this organization will have grown in comparison with the budget generally.

I don't know that there are any controls here. It seems to me that the secretariat advises you of how much money you need. You divide it into the expenditures of the Crown corporations and you come up with a number. I don't suppose that they squeal very loudly when they get a little bill for a few hundred thousand dollars for the administration of the secretariat. It would seem to me that for that very reason there would be very little public concern if next year you brought in a budget of $4 million and the year after that brought in one for $8 million. That's a genuine concern.

I'm advised that there's no mechanism in here that would control the growth of the secretariat, other than your levy on the corporations.

Hon. G. Clark: The budget comes forward every year, the same as every other ministry of government. I can advise you that I don't get to participate in the budget decisions on my own ministry. The request was larger than was granted, which isn't surprising, because it was at the end of the day, after the rest of the ministries had been cut. We're going to make representations on the appropriate size. I would have preferred that it was a little larger this year, to be candid. My colleagues didn't agree. We'll go through and compete for funding the same way we do every other year. You

[ Page 2581 ]

can be sure that that's the budget that you're debating right now. I've made that clear. There's certainly no intent to exceed that budget. Next year we'll be before you, and you can challenge me.

I can tell you that the secretariat has saved the taxpayers millions of dollars to date. It's good value for money. I hope I'll be able to say that every year. If I can't, I know you'll hold me to account.

J. Weisgerber: Do I understand that the budget for the secretariat is approved by Treasury Board or by the Cabinet Committee on Crown Corporations?

Hon. G. Clark: Treasury Board, actually -- unfortunately. Let me say that the Cabinet Committee on Crown Corporations obviously reviews the budget submission that goes to Treasury Board -- like a ministry, in a sense. For example, in this past budget year the cabinet committee recommended something that was not modestly larger than what was finally approved by Treasury Board. That is likely to be the case again as the budgeting process takes place. Essentially it goes through two hoops. It goes through the cabinet committee on Crowns; then that goes, as part of the Ministry of Finance's presentation, to the Treasury Board, at which point I'm absent from the deliberations.

J. Weisgerber: Perhaps the minister can tell us about the offices and other real estate and accommodations that have been rented, leased or otherwise undertaken to provide for the needs of the secretariat. I'd like to know where the offices are located, if there is more than one. I'm curious also as to the size and the cost of those offices.

Interjection.

J. Weisgerber: As a matter of fact, this question is going to get very long unless the minister returns. Perhaps I should try to lump it together with another question, rather than make this one too difficult and too long.

The auditor general recommended some framework of accountability for Crown corporations. I'm wondering whether or not the secretariat finds itself involved in this framework of accountability. If so, what part does it play in that activity?

[M. Lord in the chair.]

Hon. G. Clark: The office is in the attic of the wax museum here, and there is also one at 200 Granville Street in Vancouver, which is at the foot of Granville across from Canada Place. The total amount of building occupany charges is $165,000 per year, which, by the way, for Vancouver space is very good and better than many of the.... Mind you, there are a fair number of good deals right now for downtown Vancouver. It's very reasonable.

J. Weisgerber: Could the minister tell us whether these properties are BCBC properties or privately leased properties?

Hon. G. Clark: The wax museum is BCBC property; 200 Granville Street is Marathon Realty.

J. Weisgerber: During the election we were treated to a picture of the current Minister of Government Services walking around and pointing to vacant buildings. She was suggesting that these were somehow a picture of waste by the government of the day. Did all of those vacancies evaporate, or were none of them suitable for this particular activity?

Hon. G. Clark: We're reviewing the operations of BCBC in order to minimize surplus office space, and I gather success has been made in that regard as well. But at this point, on the Vancouver side, there is limited availability of the office space required. This space was at a good price and close to the cabinet offices, so it was agreed to.

J. Weisgerber: Am I to understand that the minister is saying that basically BCBC doesn't have any vacant office space in downtown Vancouvver?

Hon. G. Clark: This particular site is one of three sites recommended by BCBC.

J. Weisgerber: I don't know what kind of responsibility the minister has for office space, so perhaps I'll leave that and move down to Committee A where I think the Minister of Government Services is presently dealing with her estimates and ask the same series of questions there. Can the minister tell us the size of the office space in Vancouver?

Hon. G. Clark: I don't know the square footage, but I'd be delighted to find out for you.

J. Weisgerber: I suppose that's always one of the dangers of asking the question that you have the answer to. I'm led to believe it's about 4,200 square feet. Perhaps you could confirm that. Could the minister advise how many people are working out of that location?

Hon. G. Clark: It varies, obviously, depending on the vast majority of those consultants and contractors who come in from time to time. Recently we had a couple of people working at ICBC, and they're no longer using the offices at 200 Granville. I guess at any given time there are probably eight or nine people. It varies with secretarial help and the like.

I don't know the answer to the size of the office.

J. Weisgerber: Perhaps the minister would be good enough to bring the size of the office and the number of full-time employees back to us and whatever other provisions there might be.

I'm moving very near to the end of the questions I have, so I'll take my place and let the other members, if they have questions, proceed. I hope to have an opportunity to review my notes and come back if there's anything else.

[4:15]

[ Page 2582 ]

C. Tanner: In this conversation we've been having for the last hour and a half, I somehow missed Mr. Williams's title. I heard that he had a deputy minister status as far as his salary is concerned. What is his title?

Hon. G. Clark: Secretary to the Crown corporations committee of cabinet.

C. Tanner: I heard you referring to "secretary" a number of times, but I didn't realize you were talking about Mr. Williams.

When the Crown corporations are talking to the secretariat and to Mr. Williams, who reports on behalf of the Crown corporations?

Hon. G. Clark: I'm not sure what you mean? Could you clarify that?

C. Tanner: If the secretariat wants to talk to a Crown corporation, to whom would they talk? To the board? The CEO? The department within the Crown corporation? Who do they specifically address?

Hon. G. Clark: They would talk to people in the Crowns at the request of the minister, and only at their request. They generally talk first to the CEOs or presidents but certainly not always. The Crowns have been asked to cooperate in information gathering with the Crown corporations secretariat, so information is to be made available to secretariat staff as and when needed.

C. Tanner: If you were going to put a line of authority together, it would start with you, Mr. Minister, as being at the top and having the most authority. It would be the secretariat next, then the Crown corporations, then the board of the Crown corporations. Is that how it's structured?

Hon. G. Clark: No, not at all. The minister responsible for that particular Crown is the minister responsible. The board obviously has certain statutory obligations. The secretariat is only to give independent policy advice to the minister, so they can collect information from the Crowns, discuss options with the Crowns and report to the minister.

C. Tanner: Perhaps I could get this in perspective. If the CEOs from the Crown corporations were in a room with Mr. Williams, who would be the senior member present?

Hon. G. Clark: I don't know what you mean by "senior." There isn't a pecking order. The CEOs are responsible for the activities of their Crown corporation. The secretariat gives independent policy advice to the minister responsible.

C. Tanner: Do the CEOs get together as a group and talk to the secretary of the secretariat? Do they discuss policy decisions for all Crown corporations or any specific Crown corporation?

Hon. G. Clark: We had the first meeting with the CEOs and the senior financial officers of the Crowns. They met with the secretary to the secretariat collectively to discuss this capital valuation review that we were talking about earlier in terms of cost benefits and common criteria for evaluating capital.

C. Tanner: Was the minister there? If the minister wasn't there, who was the senior person in that room when the Crown corporations got together?

Hon. G. Clark: I don't understand what you mean by "senior person." The committee of cabinet approved a capital valuation review. On those instructions, the secretary met with the CEOs and SFOs of the Crowns to discuss evaluative criteria that might be applied to all Crowns when it comes to capital questions. I don't think a pecking order question is appropriate. It's more of a collegial discussion, reporting back to the cabinet committee, in this case, because we're trying to have common standards.

C. Tanner: This has got to be the first government bureaucracy I've ever seen where there isn't a pecking order. It seems to me that if those Crown corporations got into a room together, some of them responsible for millions of dollars and some of them responsible for a million dollars, obviously some have got more importance than others. If our friend sitting to your left is there as well, I suspect that there is a pecking order, and the pecking order starts with him. But the minister doesn't want to say that.

An Hon. Member: He doesn't get paid as much.

C. Tanner: He's not worth as much.

Does the minister see that if this secretariat is successful, it will eventually disappear? It will have accomplished what it wants to do, and that's to make the Crown corporations more successful.

Hon. G. Clark: No.

C. Tanner: Now we've got it, haven't we? We've got a new ministry set up to run the Crown corporations and advise the minister with nobody in charge of it except himself -- according to him -- that answers to nobody, that takes money out of the Crown corporations, and the only thing it can do from here on in is get bigger. Is that true, Mr. Minister?

Hon. G. Clark: No.

F. Gingell: I would like, if I may, to go back a little to some earlier responses that were given to questions from the leader of the third party. You were talking about what the budget might have been before Treasury Board cut you back. What kind of budget did you have in mind originally?

Hon. G. Clark: I can't remember exactly. I think it was about 10 percent higher, though.

[ Page 2583 ]

F. Gingell: As a result of that cutback, have there been any functions, roles, mandates that were originally included in the mandate of the Crown corporations secretariat that have been cut out because of a lack of resources?

Hon. G. Clark: Essentially we cut the consulting budget to accommodate it. All it really means is that we have to rely on the Crowns a bit more. There's a little bit less of a consulting budget because of the Crowns themselves trying to do that work. We can rely on the resources and the expertise in the Crowns themselves. I certainly understand Treasury Board's dilemma, having dealt with the rest of the budget. I have no problem supporting it. We can certainly accommodate what we're trying to accomplish with the budget allocated by Treasury Board. I expect that that will be the same this year.

F. Gingell: You spoke briefly in passing about savings and additional earnings that have already started to accrue to the Crown corporations because of the work of the secretariat. I didn't catch what they were. Perhaps you could elucidate a little.

Hon. G. Clark: At this point I'd rather not, because it's early in the year. There are certain things that we're working on that we anticipate will save money. I would say that the first and most important one is the new instruction to B.C. Rail that will result in increased revenue to the Crown if there is an upside price, which we expect and are optimistic about. Secondly, the secretariat helped to move the 24-hour sailings along, at least in small measure. That should potentially save us capital costs down the road, and it certainly improved service to the public.

There have been some improvements, and we're quite confident that there will be more over the course of the year. As you know, we've only been in office a few months.

F. Gingell: As a matter of fact, none of the things that the minister has mentioned have actually happened yet; they're all things that will come about in the future. Perhaps the minister would advise us if the Crown corporations secretariat has advised him that all-night sailings are going to increase the revenues of B.C. Ferries or just relieve some congestion and reduce revenues, as I understand that the late-night sailings will be at a reduced fare.

Hon. G. Clark: Most of the work is done by the Ferry Corporation itself, not by the secretariat. Our preliminary review was one of the reasons for moving it along. The incremental cost of the all-night sailings is about $1 million. It's anticipated that revenue at a reduced rate will fully cost-recover that. That takes the place of building more and bigger ships to increase capacity. If you look at it in terms of providing that service with alternative techniques and with limited hours, that alone will probably save millions of dollars in capital expenditures.

While the ICBC review did result in a rate increase, a $90 million loss would have been incurred had we accepted the ICBC board's original recommendation. That's $90 million in additional loss had we not had the Peat Marwick review, commissioned by the secretariat, to improve the bottom line of that corporation.

F. Gingell: If I may, I'd just like to turn the minister's attention to B.C. Systems Corporation and B.C. Buildings Corporation. It seems to me that, different from all the other Crown corporations, these two corporations are purely and simply service bureaus for different ministries of the provincial government. I was wondering if the Crown corporations secretariat has made any recommendations to you with respect to whether or not this corporate organization or setup is a sensible way of dealing with these two particular roles.

Hon. G. Clark: That hasn't been reviewed yet by the secretariat. Specific questions governing those two Crowns would be better put in Committee A, which is sitting right now, with the minister responsible.

F. Gingell: I hope you don't answer this question the same way. A couple of years ago the British Columbia Systems Corporation was partially privatized to a company called Hi-Tech Systems, I think. Is there any intent on the part of the Crown corporations secretariat to deprivatize HTS at this point?

Hon. G. Clark: No. Each agency in review will be taken on a business basis. The Crown corporations secretariat recommended the abolition of the B.C. Hazardous Waste Management Corporation, which was a Crown. So that was opposite to the direction that you're suggesting. On the B.C. Systems Corporation question, that's for the minister responsible and the staff of the B.C. Systems Corporation.

F. Gingell: Would the Crown corporations secretariat get involved in questions regarding the approach that the B.C. Systems Corporation should take in offering their services to other ministries and divisions of the ministry?

[4:30]

Hon. G. Clark: The secretariat has been promoting more competition to make the Systems Corporation and BCBC compete and bid for business from government in a general sense, but we haven't gone into any more detail than that. There have been a few cases where we've discussed it. But as a governmentwide policy, we're trying to make the Systems Corporation compete for business so we're not subject to monopoly pricing from that Crown. Again, generally speaking, that has been up to the minister responsible. The secretariat has played a limited role with respect to the Systems Corporation to date.

F. Gingell: I appreciate that the B.C. Systems Corporation is the responsibility of another minister, but the Crown corporations secretariat.... Obviously if they got into a discussion such as you've just discussed, that becomes a fairly significant issue. I was wondering whether the Crown corporations secretariat, in

encour-

[ Page 2584 ]

aging B.C. Systems Corporation to compete for work, has ensured that they only compete on a fair basis. Obviously the B.C. Systems Corporation doesn't have the same profit pressures that a private company does, such as: if you're not profitable this week, perhaps you won't meet your payroll next month and you will be out of business.

I was particularly concerned about the question of a contract between the British Columbia Systems Corporation and the B.C. Assessment Authority, which previously had in fact been serviced by Hi-Tech Systems, the privatized company. I'm wondering whether you could give us any background on that particular situation.

Hon. G. Clark: Sorry, I can't. You'd have to ask the minister responsible. But let me say this: there is a dividend policy which requires B.C. Systems to operate like a private sector. So they do have a dividend target, which puts the pressure on them to perform like a private sector model. They are exceeding the target in the plan in terms of the business plan presented, which precedes our administration in terms of trying to move in that direction. They are encouraged to bid just like a private sector model. But be careful.

There are some advantages to having that expertise in one source for government, so you wouldn't want to throw the baby out with the bath water, so to speak, in terms of taking advantage of the Systems Corporation's expertise in a broad sense. The minister responsible is reviewing these questions, and we haven't come to grips with it in the secretariat yet.

F. Gingell: I seem to remember that Peat Marwick was somewhat critical of the demands of the previous administration in requiring dividends to be paid, and in fact criticized the previous administration for demanding dividends when it required the Crown corporation to take out a bank loan to pay the dividend. I was wondering what your attitude is towards this, Mr. Minister.

Hon. G. Clark: I think Peat Marwick made some good points. Borrowing from the bank to pay the dividend is not good public policy, but requiring a dividend is generally good public policy in order to encourage that kind of profit motive and that kind of incentive to efficient operation.

I think part of the problem with the previous government is setting an artificial dividend and then requiring it to be paid without the kind of detail work which we're now able to do with the secretariat to see whether there are efficiency gains, to put pressure on the corporations to be efficient, to have a dividend policy which is reasonable and is attainable, so there's a bit of a balance there. The previous government, I think at least in the case cited.... You know, it was an artificial dividend required to try to balance the books in an election year, and I don't think that's good public policy.

F. Gingell: So do I take it that your policy will be that Crown corporations will not be required to pay a dividend if the payment of such dividend requires them to borrow those funds?

Hon. G. Clark: Sorry?

F. Gingell: The question was: was your response making a clear commitment that at no time in the future would a Crown corporation be required to pay a dividend if that required them to borrow the money?

Hon. G. Clark: I'm only hesitating because there are some big Crown corporations that are required to borrow money in the course of their business, and it may be difficult to disaggregate between.... It's clearly not our intent to require Crown.... It's clear policy not to require them to borrow money to pay dividends, but in the case of B.C. Hydro, they borrow a lot of money to do business, and pay dividends on a rational basis. I just don't want to mislead you that Crown corporations borrow money routinely and pay dividends routinely. Clearly they shouldn't be borrowing money from the bank to pay dividends; that's certainly not our policy.

F. Gingell: We were speaking earlier about the mission statement of the Crown corporations secretariat. One of the problems we've come across is that there seems to be a lack of mission statements by the Crown corporations themselves. I was wondering if the Crown corporations secretariat is planning to play any kind of role in ensuring that mission statements by Crown corporations are made and in helping them to develop them.

Hon. G. Clark: That's a good point. You're right, there are Crowns without mission statements. It is certainly our intention to encourage them to do so.

The Crown corporations secretariat -- be careful again, though -- reports to the Crown corporations committee of cabinet. It's up to the cabinet committee and the minister responsible to direct the Crowns to develop mission statements. We are aware of that. It is on the agenda, and I think it's fair to say that the ministers responsible will be ensuring that those Crowns do prepare mission statements.

C. Tanner: I didn't quite conclude my questions. I have one more to the minister, which wraps up all the previous ones. I have two concerns. One is that what we're seeing here with your secretariat is a duplication. I've heard a lot this afternoon which, in some respects, assures me that it isn't a duplication. But I can see where it might be.

The second one is: surely the people with the most expertise in Crown corporations are in the Crown corporations themselves, in many respects. If they aren't, they should be. They have the expertise within the Crown corporations to make the secretariat work. Could the minister tell the House why he didn't choose to go that route -- perhaps with Mr. Williams in charge -- and choose people within the secretariat? There are two reasons: one, it would be less expensive; and two, it seems to me that the competition among the Crowns

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themselves would keep that committee honest, particularly under the direction of the gentleman on your left.

Hon. G. Clark: We do have many excellent staff in the Crowns. In fact, one of the ideas I would like to explore is seconding people from some of the Crowns to the secretariat, because then we can help develop some review. They may have some expertise in that Crown and could lend their experience to other Crowns. It's certainly our intent to make this a part of that ground.

I think you can see by the size of the organization, which isn't large relative to the Crowns, that we have no intent of duplicating the work of the Crowns, nor would we have the capacity to do so. It's really a question of giving some quick policy advice, maybe lists of questions, and pushing the expertise in the Crowns to make sure they're responsive to the government's agenda and that they're assisting us in coordinating policies among the Crowns.

D. Mitchell: I have a question on a related topic. I don't want to belabour this point, but I'm somewhat confused about the function, terms of reference, role and potential evolution of the secretariat.

When the Crown corporations secretariat was first announced in the early days of this administration, the minister referred to the cabinet committee as fulfilling an accountability function. What we've heard today in the committee is something quite different. It's certainly not public accountability that he's referring to; the evidence of that is the all-night ferries from the B.C. Ferry Corporation. Public accountability is not part of the function, although the minister has indicated and admitted to the committee that the Crown corporations secretariat did play a

part in that decision.

The terms that have been used during the course of this afternoon's debate on the spending estimates for the secretariat include a management tool, a resource for the Crown corporations and a crisis management vehicle, which is a term he used until now. He has referred to information-gathering in terms of its function. These are all interesting terms, but one interesting comparison he made was with the Crown Management Board in Saskatchewan and its predecessor the Crown Investment Corporation, as it was called under a previous administration.

I wonder whether there is the potential, either in this year's spending estimates or in the future, to see the secretariat evolve into a kind of a holding company, parent corporation or perhaps the mother of all Crown corporations in British Columbia. Is that a direction that we're heading with the Crown corporations secretariat? Is the holding company model one that has some appeal to the minister, and is that one potential direction we're heading in?

Hon. G. Clark: It has some appeal to me, but it's not contemplated at this time, nor is it being actively considered. We prefer to keep it in-house as part of government and to work on these questions here. I'm not sure it's necessary to have a holding company if this model works effectively, and it's certainly not contemplated at this time.

D. Mitchell: The reason I ask is that I think it is one model, and it's one that the minister indicates he has some predilection for himself. The previous administration had developed something called British Columbia Inc., which I don't think was a very well-thought-out idea. It looked at the Crown sector and whether or not there was some merit in tying it together with a coherent strategy. From what the minister has told us, I think that is what is being attempted here through the secretariat in a more modest fashion, perhaps. Various members of the committee this afternoon have indicated some concern about where this is all going.

The minister has indicated that the secretariat does not take a hands-on approach to the Crown corporations, but there are certainly several cases in point that would indicate otherwise. I would mention just one case, and that's the appointment of the interim president of ICBC, Robyn Allan. If the secretariat does not take a hands-on approach, then why would a staff member of the secretariat have been parachuted, so to speak, into ICBC's senior executive position on a temporary basis? Does the minister want us to believe in this committee that the secretariat had no role at all in Robyn Allan's appointment as interim president of ICBC?

Hon. G. Clark: Actually, she had experience working for the Saskatchewan insurance corporation and was available at the time. We were trying to clean up a difficult situation, and that's the main reason she became available on an interim basis while we do a search.

I don't mean to say that the secretariat doesn't play a role in these decisions and doesn't have influence over these decisions; not at all. All I'm saying is that the Crowns themselves, with the ministers responsible, make the decisions and carry out policy -- in all regards working with the boards.

In that particular case it is true that we had a person working for the secretariat who was available, who did have some expertise in the area and whom we could move in -- at least while we do a search. But that's a bit unusual.

D. Mitchell: If it was unusual, I think it does point out the nature of this beast that has been created. This Crown corporations secretariat certainly has the potential to head off in a number of different directions. It can be hands-on; it doesn't have to be. It can be a resource or a management tool