1992 Legislative Session: 1st Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JUNE 9, 1992

Afternoon Sitting

Volume 4, Number 9

[ Page 2355 ]

The House met at 2:05 p.m.

Hon. G. Clark: I have the pleasure today of introducing to the House a distinguished member of the Alberta Legislature who hails originally from Vancouver East, Tom Sigurdson, the member for Edmonton-Belmont. I'd ask the members to make him welcome.

In addition, I have a former constituent of mine, who is now a constituent of the Leader of the Opposition in Sechelt.... We're everywhere, hon. Speaker, people from Vancouver East. I'm very pleased to introduce Arnot Tuffs to the House.

Hon. L. Boone: Today we have a special guest from Ottawa in the members' gallery. I'm pleased to introduce His Excellency Bruce Brown, High Commissioner for New Zealand to Canada. The high commissioner is accompanied by Mr. Irvin Paulin, the newly appointed consul general of New Zealand in Vancouver. The high commissioner is retiring after a most successful appointment to Canada. He was returning to New Zealand from Vancouver, and we wish him well. Will the House please welcome him.

G. Janssen: It gives me great pleasure to introduce to the House today two hard-working people from my constituency and my constituency office, Eleanor Gulstene and Marlene Dietrich, alive and well and living in Port Alberni.

N. Lortie: I'm extremely pleased to introduce a beautiful young lady to the House today: my daughter, and the mother of my two grandchildren, Elizabeth Craig. Will the House make her welcome.

Hon. L. Boone: It gives me a great deal of pleasure to introduce my executive assistant, Sheryl Kozyniak, who is in the gallery with her fiancé, Darwin Thower. Would the House please welcome them.

J. Doyle: It is a pleasure for me to introduce a very good friend of mine, Kim Bennett, who is in the gallery today. Kim lived in Golden for many years and now lives in Duncan. Also, my wife, Judy, and I are godparents of her son, Jesse. I'd like the House to make her welcome.

M. Farnworth: It's a pleasure today to introduce 63 grade 7 students in the gallery from Cedar Drive Elementary and their teacher, Mr. G. Foulkes. I'd ask the House to please make them welcome.

Hon. A. Charbonneau: I would ask the House to make welcome my executive assistant, Shirley Dorais, from the beautiful city of Kamloops.

D. Mitchell: I notice in the gallery today a former Member of the Legislative Assembly in Saskatchewan, who was a member when I sat as a Clerk at the table in that House. He also went on to become a very distinguished member of the executive council in Saskatchewan. Could members please welcome Dr. Lorne Hepworth.

Hon. D. Marzari: I have the very special honour today of introducing the distinguished couple in the gallery who happen to be my parents. Would the House please welcome Mr. Bill Smith and Mrs. Frances Smith?

Hon. T. Perry: I'd also like to welcome the Smiths.

I've noticed a couple of other people in the gallery, although I'm not familiar with their names. I'm in such a good mood today, and I'm sure all other members are. Perhaps we could welcome everyone else who hasn't been introduced yet today.

The Speaker: Before I call on the Clerk, I would remind all hon. members that they should have a notice on their desks reminding them that the official photograph will be taken tomorrow. Members are asked to be in their seats by 10:45 precisely.

Introduction of Bills

COOPERATIVE ASSOCIATION

AMENDMENT ACT, 1992

Hon. L. Boone presented a message from His Honour the Lieutenant-Governor: a bill intituled Cooperative Association Amendment Act, 1992.

Hon. L. Boone: The Cooperative Association Amendment Act, 1992, which I'm introducing today, amends the Cooperative Association Act to permit provincially incorporated cooperatives other than non-profit cooperatives to transfer out of the province to another jurisdiction. Cooperatives incorporated in other jurisdictions will also be permitted to transfer into the province. The bill will permit members to dissent to the transfer out of the province and obtain repayment of moneys they have invested in the transferring cooperative. The bill also clarifies the application of membership termination provisions for housing cooperatives.

Bill 60 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.

[ Page 2356 ]

PERSONAL PROPERTY SECURITY

AMENDMENT ACT, 1992

Hon. L. Boone presented a message from His Honour the Lieutenant-Governor: a bill intituled Personal Property Security Amendment Act, 1992.

Hon. L. Boone: The Personal Property Security Amendment Act, 1992, corrects a number of technical problems with the Personal Property Security Act. These problems are creating uncertainty in the law and are adding to the expense of obtaining commercial loans. By reducing the uncertainty in the law, this bill will reduce legal fees for arranging loans and lower the cost of obtaining credit.

The amendments contained in this bill clarify the intent of the statute, but do not affect the underlying policy. I commend this bill for your consideration and urge its passage.

Bill 57 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.

ATTORNEY GENERAL STATUTES

AMENDMENT ACT (No. 2), 1992

Hon. C. Gabelmann presented a message from His Honour the Lieutenant-Governor: a bill intituled Attorney General Statutes Amendment Act (No. 2), 1992.

Hon. C. Gabelmann: I'm pleased to introduce Bill 58, the Attorney General Statutes Amendment Act (No. 2), 1992. This bill contains amendments to seven statutes administered by the Ministry of the Attorney General. They are the Correction Act, the Escheat Act, the Family Relations Act, the Land Title Act, the Liquor Control and Licensing Act, the Supreme Court Act and the Wills Variation Act. I will elaborate on the nature of these amendments during second reading of this bill.

Bill 58 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.

[2:15]

COMMISSIONER ON RESOURCES

AND ENVIRONMENT ACT

Hon. C. Gabelmann presented a message from His Honour the Lieutenant-Governor: a bill intituled Commissioner on Resources and Environment Act.

Hon. C. Gabelmann: I am pleased to introduce Bill 56, the Commissioner on Resources and Environment Act. The purpose of this bill is to create a Commission on Resources and Environment and to affirm its independence from any government ministry. It establishes the commission's comprehensive mandate, which includes the development of a provincewide strategy for land use and for the management of related resource and environment issues. It defines the commissioner's role at the regional and community levels, and requires him to facilitate the development and implementation of a dispute resolution system.

It makes the commissioner responsible for the provision of independent advice to the government in land use matters.

Bill 56 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the Houses after today.

SECURITIES AMENDMENT ACT, 1992

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

Hon. G. Clark: Bill 59, Securities Amendment Act, 1992, proposes a variety of amendments to the Securities Act. The primary purpose of this bill is to make miscellaneous technical amendments to the Securities Act that are needed to correct deficiencies in the legislation and to respond to recent developments in securities markets and interjurisdictional regulatory arrangements.

Most importantly, the bill includes an amendment that would authorize the commission to apply to the Supreme Court of British Columbia for assistance in obtaining evidence from persons outside the province. I am particularly pleased with that.

Bill 59 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

INTERPROVINCIAL FREE TRADE

G. Wilson: My question today is to the Premier. The question is fairly direct, and I hope we will get a succinct answer.

Does the Premier agree with the statements made by the Minister of Government Services at a business seminar on domestic free trade in Vancouver, where the minister spoke out against an interprovincial free trade agreement?

Hon. M. Harcourt: Hon. Speaker, I'd like to see those comments. Quite frankly, I am not aware that she made such comments, so I think you should ask the minister directly rather than through a go-between. If you want a direct answer, ask the person you want an answer from.

G. Wilson: I am asking directly; I'm asking the Premier if he agrees. Let me direct my question more specifically. With relation to the common market clause on social and economic union that is currently being negotiated back east in Ottawa, can the Premier tell us what instructions the Minister of Labour and Minister Responsible for Constitutional Affairs has been given, given that the B.C. Federation of Labour has taken a position in opposition to an interprovincial free trade agreement? What position is the government taking

[ Page 2357 ]

with respect to this particular clause in the constitutional amendment?

Hon. M. Harcourt: Well, our government is participating across Canada in a major initiative to remove as much as possible barriers to the free flow of capital, of people, of services and goods between the provinces. The commitment of the first ministers and our trade and government services and other ministers is to remove those barriers as much as possible by 1995. That's the position of our government.

The Speaker: Final supplemental.

G. Wilson: Given that the government is committed to an interprovincial free trade agreement -- and I would take it that that's the Premier's statement -- can the Premier tell us whether or not this government holds the position that that should be an individual right to free trade, or whether or not that in fact will be done by government agreement?

There's a significant difference, as the Premier will recognize, because it essentially is a difference that will recognize the individual's right to free trade as opposed to the proposition of governments putting in place protectionist legislation with respect to special friends and insiders, shall we say.

FUNDING FOR AMATEUR SPORTS

L. Fox: My question today is to the Minister of Health. Has the Health ministry conducted any research to quantify the long-term cost saving to the health care system associated with preventive health strategies, particularly in the area of physical fitness? Can the minister specifically tell us how the 13 percent cutback to amateur sports and the 40 percent cut to Sport B.C. fit into that strategy?

Hon. E. Cull: The questions with respect to amateur sport should be directed to the minister responsible, the Minister of Municipal Affairs, Recreation and Housing.

I don't have any specific reports that I can quote to you right now about the impact of preventive health care and the impact on costs; but I can say in a very general way that a royal commission spent 20 months.... I've received over 500 presentations from around this province. I'm sure that we'd find many examples we could point to in the material that is archived from that commission's work.

L. Fox: My supplementary goes to the Minister of Tourism. Has the Tourism ministry determined the extent of the negative impact that the funding cuts to amateur sports and the elimination of lottery support will have on local tourism in British Columbia? Does the Tourism ministry have any idea how much local economies will lose as a result of the government assault on amateur sports and reduced travel assistance?

Hon. D. Marzari: The government is constantly in awe of how the opposition and the third party can ask for more and more money. The opposition and the third party do not vote for any bills on taxation and do not vote for any measures that we are trying to take to deal with a budget deficit that could have reached $3 billion. The opposition and the third party do not seem to....

The Speaker: Relate it to the question, please, hon. minister.

Hon. D. Marzari: The third party is now asking for a study in Tourism as to the impact of cutbacks for amateur sport. This government is strongly behind amateur sport. This government is strongly behind the Commonwealth Games. This government will be supporting to the hilt, with the federal government and the communities, the Commonwealth Games in 1994. This year's cutback for amateur sport is a cutback which not everyone likes. However, it is a necessary cutback. We will be refuelling, redeveloping, and planning towards the Commonwealth Games in 1994 in a way that this province has never seen before.

L. Fox: Given that the Minister of Health really understands the importance of preventive health strategy and given that the Minister of Tourism is extremely committed to amateur sport, perhaps I could address my second supplementary to the minister responsible for lotteries.

Given the fact that the minister has requested input from municipalities and many societies all across British Columbia on how lottery dollars should be allotted and what type of projects should qualify, which seems to indicate to me that there are some lottery dollars available, perhaps the minister can now agree to restore the $2 million that was axed from amateur sports and insist that the government immediately redirect lottery funding to the purposes for which it was intended.

Hon. L. Boone: I thank the member for the question so that I can clarify some of the misunderstandings that are out there. There is no such thing as the Lottery Fund anymore. There is a community grants fund in my ministry for which I am getting information from the public as to their needs and what they see as their priorities. However, the dollars that have been taken from lotteries are now in general revenue. They have been allocated, as you know, through Treasury Board to various ministries. They are voted money and are responsible to the ministries. There is no slush fund.

That existed in the former government. We do not have a slush fund that we can dip into at any given time. The dollars that we have are voted. I would suggest that you wait until next year to see what the voted dollars will be for the various programs.

[ Page 2358 ]

NORTH AMERICAN

FREE TRADE AGREEMENT

W. Hurd: I have a question to the Minister of Economic Development, Small Business and Trade. It's regarding this headline: "B.C. Bucks Trade Talk to Cheers of Workers." We know that this minister likes making major trade announcements before placard-waving trade unionists, but perhaps he can indulge the people of the province and the business leaders by telling them why, of the ten provinces in this country, British Columbia is apparently no longer going to be involved in North American free trade talks.

Hon. D. Zirnhelt: Needless to say, I'm pleased he asked the question. I didn't see any placards. I went to a meeting of people who were seriously concerned about the downside of the globalization of the economy. I spoke to people about the seriousness with which the government of British Columbia takes the need to have some kind of efforts in place to deal with the dislocations that affect our workers and our communities when capital is freer to move around the world. I think it's time that somebody in Canada stood up for the working people.

W. Hurd: The opposition notes that the Premier has urged the government to withdraw from these particular free trade talks as well. My question to the Minister of Trade is: how can British Columbia's case on NAFTA be pressed when we aren't even at the table? Who's driving our trade and development strategies in this province -- the B.C. Fed or this minister?

Hon. D. Zirnhelt: The answer to your question is that the government is driving this government's trade policy.

W. Hurd: I appeal to this minister for a straight answer on one question. What point is there in this minister and the Premier globetrotting on trade initiatives around the world when he won't even commit his government to supporting our participation in the most important round of trade negotiations in this century? Is this minister even aware that half our exports in this province go into North American markets?

Hon. D. Zirnhelt: I guess I have to inform the member that we have been at the table. We've been passed secret document after secret document, been told not to discuss it with anybody and to expect the people of B.C. to support an agreement that can be changed by the U.S. Congress. The gutless government in Ottawa would not have a chance to do a damn thing with it.

[2:30]

Interjections.

The Speaker: Hon. members, question period is a limited time. In order to give respect to those who are asking questions and to those who are answering them, we must have order in the House.

D. Mitchell: The Minister of Economic Development and Trade indicated that he has had access to documents. I wonder if the minister might be willing to table those documents in this House. In a letter to the Prime Minister, the Premier has urged the federal government to withdraw from the North American free trade talks. His reason is that the Americans have on occasion dealt unfairly with Canadians.

My question is to the Premier. Does he really believe that the Americans will be more inclined to trade fairly with us when, instead of trying to stay in the game, we have taken our marbles, left the game and run home?

Hon. M. Harcourt: I think what the opposition House Leader is suggesting is that we stay mute, stay at the table, have the Prime Minister initial that agreement, have the President of Mexico initial that agreement, have the President of the United States initial that agreement, and that's it. The only people who can change it after that are not the people of Canada, not the people of Mexico, but the Congress of the United States. If that's the way the opposition House Leader wants to conduct the affairs of the people of British Columbia, that's not the way we want to do it as government in British Columbia.

D. Mitchell: The Premier has indicated that British Columbia will have nothing to do with the NAFTA negotiations. He and his ministers somehow think that we in British Columbia can resist globalization of trade. The Premier seems frightened that if we somehow participate or sit at the table, we will somehow be hypnotized into not being able to resist an agreement or say no to it once we know what it is. My question to the Premier is: how can British Columbia's interests be represented if we're not even at the negotiating table?

Hon. M. Harcourt: We are at the negotiating table, and we'll stay at the negotiating table. What we are saying loud and clear is that the hub-and-spoke trade strategy of the United States is not acceptable to the people of Canada, not acceptable to the people of B.C. What we would like to see instead is a hemispheric trade deal among free, democratic nations without one party predominating. If the Liberal opposition is saying they favour the Ronald Reagan, George Bush, U.S.-driven trade strategy, I want you to know that that is not the path that this New Democratic government wants to take.

We want to see a trading relationship from Antarctica to the arctic of free, democratic nations, not having one nation predominate.

The Speaker: The bell signals the end of question period, hon. member.

D. Mitchell: Point of order. I think question period is 15 minutes long, but that does not include filibustering by pounding on desks like hon. members opposite.

Hon. Speaker, I would ask whether or not we could be permitted one more question, given the fact that there was a filibuster exercise going on.

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The Speaker: I regret, hon. member, that the Chair has been consistent, when the bell has rung, that it does signal the end of question period.

Presenting Petitions

F. Garden: I beg leave to present a petition, hon. Speaker.

Leave granted.

F. Garden: The petition is from my constituents and deals with Bills 13 and 14.

Orders of the Day

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

section A is the Ministry of Government Services; in

section B is the Ministry of Tourism. Upon completion of the Ministry of Tourism, we will go on to the Ministry of Finance estimates.

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

ESTIMATES: MINISTRY OF TOURISM AND

MINISTRY RESPONSIBLE FOR CULTURE

On vote 58: minister's office, $308,000 (continued).

Hon. G. Clark: I'm delighted to participate in the Ministry of Tourism estimates. But I see the minister has arrived, and I know the other members have pressing business to pursue. For the sake of speeding up the business of the House as we move into June, I'll defer to other members of the House.

J. Tyabji: We have a curator at the Kelowna Centennial Museum who would like to get some conservation services for artifacts in British Columbia's museums. I'd like to know if the minister has any plans for this, or what she has in mind.

Hon. D. Marzari: I have not personally reviewed that particular grant application, so I will take it on notice and get back to the member.

A. Cowie: A question for the minister regarding heritage, which comes under the minister's jurisdiction. It used to come under another ministry. I think probably this is the right place to have heritage -- in with Tourism and Culture -- as long as there's a great deal of cooperation with the Minister of Municipal Affairs, Recreation and Housing.

We probably all recall Barclay Manor in the West End in Vancouver. Barclay Manor was preserved and redeveloped into a very nice community facility with a grant of some $50,000, which started it off. The same thing happened some years ago to Brock House, which is now a seniors' centre as well as a restaurant that pays for most of the upkeep. There are a number of other heritage community facilities around Vancouver as there are elsewhere in the province. Perhaps the minister can give me a brief

summary of the programs she intends to have within this budget for carrying on the tradition of helping with heritage homes and other buildings that are used for community facilities.

Hon. D. Marzari: Mr. Chairman, I should offer to share the guide to programs of the Heritage Trust with the member, because the guidelines for Heritage Trust basically spell out the criteria by which heritage homes, places or trails might be adjudicated. Heritage Trust, as the member probably knows, is an arm's-length trust paid for by government to the tune of $2.5 million this year so that Heritage Trust can get involved with the activities of adjudicating, acquiring and fixing up heritage properties. The guidelines for such activities are spelled out in Heritage Trust.

Vis-�-vis the Heritage Trust, it is not the minister's position -- because it is at arm's-length -- to comment on the validity or the saliency of any particular application. Rather the Trust itself, guided by staff from the cultural ministry, do most of this work. Other programs that are involved in culture include heritage properties, which is another division of the ministry that actually does maintenance and upkeep of properties that have been acquired in the past.

Another program that the ministry runs or funds is the Crown stewardship program, which basically looks at government-owned properties and assesses their heritage merit. Also, the archaeology branch looks at, investigates and adjudicates, very often with native communities, the importance of sites and findings as construction occurs throughout the province. There are a multiplicity of programs, but the one that delivers in the way the member is speaking about delivery of goods is the Heritage Trust.

A. Cowie: I want to thank the minister for reviewing that with me and the House. I notice that in the past it's quite often MLAs who delivered the cheques. I don't know how that happens.

I'd like to ask a question regarding Engine 374, which used to sit in the park in Kitsilano, has since moved as an exhibit to Expo and has now been moved into the roundhouse. It has a high profile, in that a lot of people want to preserve that particular engine. Does the minister recall if that is in the Heritage Trust Fund, or is there a special fund through her ministry for that?

Hon. D. Marzari: The Heritage Trust has helped to contribute toward the preservation of that famous engine that I think of as Evie Atkinson's own project. I think it was her efforts over many years that have kept that engine, taken it from Kits beach, placed it at the Expo site and now found it an indoor place where it will be preserved hopefully for as long as the roundhouse stands, at least. The Heritage Trust, having entered into a partnership arrangement with the private sector and the local group, has put some money toward the preservation of the engine. It is now keeping an ongoing eye on how things are going and is offering to assist.

[2:45]

[ Page 2360 ]

A. Cowie: Yes, the engine is in the roundhouse. There's not absolute agreement on whether it's going to be in the roundhouse or whether it's going to be in an addition to it or not, and that's where the ministry staff come in. I have personally experienced the good work of the staff, who are very consistent as to what is heritage and what is not. On some occasions it takes a lot of leadership even in a committee to make sure that these buildings get preserved in a heritage-type manner, so I would appreciate if the minister can continue keeping on track of that, because Evie Atkinson needs help and so do the train buffs.

One final question, because as the minister probably recalls, another building which may or may not be classified as heritage but is certainly within the heritage area of Shaughnessy is the Glen Brae house -- the Canuck Place, as it's called now -- that is for parents and children, where the children have a terminal disease or they're terminally ill, so they can spend the last few weeks or months of their lives together. It's a very worthwhile project. I wonder if the minister has any information on whether the ministry is going to help with that particular project.

Hon. D. Marzari: Once again, I'll get back to the member with an update on whether or not the Glen Brae house -- the Canuck House -- has in fact applied for funding to the Heritage Trust, or whether it has approached other divisions in the ministry. I will let the member know and keep him informed and in touch on both items that he's raised so far.

A. Cowie: My last question has to do with the heritage of old houses that are really not quite class A or class B -- as they are called in Vancouver. There are a lot of delightful old homes in our province, and sometimes the only way to preserve them is perhaps to allow an extra suite, allow some flexibility for what goes on inside of these houses and to give the people that work very hard to upgrade these houses some kind of recognition.

I know that the minister will recall 10th Avenue in Vancouver, not far from the city hall, where in fact the city has plaques on a number of the houses. Now it's caught on and people are just simply doing their utmost to preserve the houses. I wonder, from a general point of view, whether the minister has a program to help honour people who go through all that hard work and help try to preserve old homes, and also to honour municipalities that actually will go forward and be quite flexible with their zoning to allow flexible use in some of these older buildings.

Hon. D. Marzari: There is draft legislation coming forward from my ministry. Not in this session, because I'm strongly of the opinion that the legislation needs further consultation. When it is brought before this House -- hopefully next spring -- it will be the most progressive heritage legislation in the country.

One of the things that it will provide for will be an increasing visibility of areas or communities or houses of local significance so municipalities might feel more heartened by a piece of provincial legislation that would enable them to preserve neighbourhoods, blocks and individual homes from a heritage point of view, from a heritage standpoint.

You're not talking about class A or class B here; you're talking about a neighbourhood. I live in a neighbourhood that is very specifically affected by legislation such as this, and my neighbourhood has been actively engaged in a local area planning process with Vancouver city hall. They have been saying that the neighbourhood wants the ability to renovate and add suites rather than have the demolition of blocks of housing, which is rapidly happening. So personally, as a citizen, I am very much aware of the need in my own constituency for such legislation.

I am aware of the need of municipalities to have the backing of a provincial piece of legislation to preserve their heritage. I think that the member will be seeing some assistance in this legislation -- although municipalities will not be forced to accept it -- to help local communities preserve their heritage.

C. Tanner: Following up on a brief note about what the last member to ask a question was saying, he asked whether it was going to be the policy of this government to have MLAs deliver cheques to various societies. I saw the minister grin. I hope it's not going to be the policy that we will be delivering either lottery cheques or any other grant unless the recipient specifically asks for it.

Hon. D. Marzari: The Heritage Trust is an arm's-length trust. As far as I know, certainly no politicians in this government have been delivering cheques to any communities on behalf of the Heritage Trust. The Heritage Trust makes its decisions and adjudications and has guidelines. It is a trust program and has all the advantages of being one. It is somewhat removed from the political decision-making, which occasionally is not as rational as the adjudication of a sponsored trust.

C. Tanner: Prior to the House rising for lunch, and prior to the little pieces of nonsense that occurred for ten or 20 minutes before we rose, the minister and I were discussing legislation that was coming down from Ottawa. She mentioned, in passing, that legislation was going to be coming down for people working in the arts. I take it that it will be labour legislation.

I have had two very distinct points of view on this, both from societies that have cultural affiliations. One said very strongly that we need it immediately; the other, equally as strongly, said: "My God, don't give us that sort of legislation; it will be the death of the societies!" I wonder what the minister's point of view is and what she intends to bring down in legislation.

Hon. D. Marzari: Basically, at the ground level, the intention is to ensure that performing artists and artists working inside agencies have basic employment standards and workers' compensation. There are a number of other working benefits that artists might qualify for. The whole area is presently encased in a bill in Ottawa, which is coming up for third reading and, I

[ Page 2361 ]

gather, should be through the House within this month. As we develop our legislation, it will be done in close consultation with the cultural community. I'm sure that there will be debates, but I want those to occur within the cultural community before that legislation comes before this House.

I am not waving any flag here to scare underfunded arts organizations; I am saying that this government respects the cultural worker. Cultural workers are very often the cultural managers as well as the workers. Status-of-the-artist legislation will be coming down, and we will be establishing a council on the status of the artist to advise me as the legislation develops.

C. Tanner: That is reassuring. I would like to think that a committee of the Legislature might be involved in it, because it is a particularly specialized subject. As the minister well knows, many artists -- while we would consider them deprived with regard to some rights they deserve as workers -- in actual fact have made that choice for themselves, and I don't think it's the place for the government to interfere. However, there are circumstances where they deserve protection.

Changing the subject once again because we haven't got a lot more time left, I would like to specifically ask the minister how lottery funds are going to affect her ministry. There has been a great change, and there's a great deal of confusion apparently in this House and abroad as to what is going to happen with lottery funds. Does the minister have a specific amount allotted to her ministry now? Does she have them allocated to specific programs? Could she tell this member and the other members present what specifically her ministry intends to do with lottery funds?

Hon. D. Marzari: The good news of this whole budget year for Culture is that there are no longer any lottery funds in Culture. What has happened this budget year, and will remain true forever, I hope, is that lottery funds and cultural budget are no longer equatable. They are not the same thing. No longer will the cultural services branch in the cultural ministry have to go cap in hand to the lotteries branch to say, "Please, sir, may we have more gruel?"

Now, as of this budget, we have a situation where the funds allocated for Culture come directly out of Treasury into cultural branch. Totally speaking, the cultural side of the ministry has a budget of $38 million. Had things gone along the way they had been going, $14.3 million of those dollars would have come out of lotteries. The way the restructuring has occurred, that $14.3 million has come to us and is now in our budget. There is no further necessity for cultural services to approach the lotteries branch.

What will happen to lotteries? My colleague, I believe, is in the Douglas Fir Room doing her estimates. Lotteries is now looking to the public and to the community to say: "What is it that you would like to see lotteries do?" They are soliciting proposals and briefs from communities around this province to find out what the future role for lotteries should be. Included in that mandate is obviously an area which the cultural services branch and this ministry have not yet captured, and that is capital funding.

Capital funding is a major part, obviously, of cultural policy, because if you build something, you've got to fill it. If you've got one party building it and another party funding the artists who will fill it, you've got the possibility for a dysfunctional operation.

The lotteries, as far as I can see, are still involved with seeking a mandate. They will not be involved with the performing or visual arts -- the workers and the performances. They might possibly have a small role in the capital funding. For the next while we've got to work out within our business plan a comprehensive plan for the cultural funding and the operational funding for arts and culture in this province. That is the logical thing to do. When you ask me what lotteries is doing this year, I say: "In our budget, nothing." In this ministry we have captured the whole ball of wax.

What remains outstanding is the question of who is going to fund the capital construction of new venues, new theatres and new performing arts centres. That is a question which remains outstanding.

C. Tanner: I thought the minister came on strong to start with. It sort of petered out a little at the end, which makes me think that these decisions haven't been finalized. I certainly appreciate that they haven't been finalized, as far as capital funding is concerned. I wonder whether they've actually been finalized within the ministry. For example, is the British Columbia Cultural Fund, which originally came from lotteries, still a fund of money? Is the Heritage Fund, which originally came from lotteries, a fund of money for which you're now using interest to fund various cultural and heritage tasks?

[3:00]

Hon. D. Marzari: The B.C. Cultural Fund was established about 25 years ago. It was funded out of general revenues and has always sat there as a special fund which has delivered a portion of its interest into the cultural services branch. That has been the function of the Cultural Fund. Ostensibly, that will continue to go on. The Cultural Fund delivers a certain amount each year into our budget. This year it's $1.615 million. That is its contribution as a special account.

C. Tanner: I understood that from time to time that original set-aside of funds -- I suspect your party over the last 20 years has never liked it, because you never did like special funds very much -- has been enhanced by money from the Lottery Fund, hasn't it?

Hon. D. Marzari: First of all, I don't think that government has any aversion to special accounts. However, from review of the special accounts that have been established over the last number of years, I must say that most of those have been shell accounts and there's no money left in them. It's interesting to be able to answer people about special accounts. In fact, most of these are just numbers on a ledger somewhere with absolutely no money. Most of the special accounts have been depleted. I'm not even sure whether the British Columbia Cultural Fund has money in it at this point.

[ Page 2362 ]

All I know is that over the years the cultural services branch has received the interest. Lottery funds have never been involved, except -- I am told by my assistant deputy minister -- from time to time to top up the contribution of the B.C. Cultural Fund.

C. Tanner: Can this member, can this side of the House and can the public then assume that we have now made a basic decision as far as lottery funds are concerned? Are they no longer, as they were originally in 1972 when we first brought lotteries to this province, to be used for culture, sports, recreation and specifically for health? Are they now going into general revenue? Will some of it come back through the departments? And will a system be worked out where people can apply through the department for some of those funds?

Hon. D. Marzari: I almost prefer to have these questions asked of my colleague in the other room, but it is my understanding that.... I know that the funds that are designated for the arts are now firmly contained in the cultural branch, in our ministry here. That is the basic message. There is no confusion about that. It was a major achievement -- although, as I said this morning, it doesn't seem major -- for arts planning and strategic development that the money be in one place so that it can be properly allocated by arm's-length agencies. That is clear.

The lotteries branch is presently investigating what it might do with some of the money it collects. My colleague the Minister of Government Services is at present conducting that public consultation to find out what the logical role of a lotteries fund, if there's to be one, should be.

C. Tanner: The last word on this. It is with some hesitation that I ask the corollary to my last question, and that is: will this also apply to casinos and bingos?

Hon. D. Marzari: The Gaming Commission, which is under the Attorney General's ministry, is presently reviewing its relationship to the organizations it funds. Arts organizations -- I know this, because I've done it myself; perhaps you have as well -- have spent many years angling to be positioned in the right place at the right time to get the right casino night to raise the $11,000 to be able to do a performance.

All of us have spent many evenings, I'm sure, in smoke-filled rooms until three in the morning, acting as the volunteer banker or whatever to ensure that a favourite theatre company or dance company gets some bucks. It's not the way to do business, and it's certainly not the way to sponsor cultural activities. The Attorney General is presently conducting his own review with the Gaming Commission as to the future development of bingos and casinos, which, admittedly, is a piece of the life stream of community services, some of which go into culture.

C. Tanner: I wanted to bring that up so that the minister could tell the world, particularly other organizations like the ones that she and I have obviously been involved in, that there is a slim chance that sometime in the next year or so people won't have to spend their time in those smoke-filled rooms. That money will be raised in a more civilized manner.

I'm going to change the subject now and ask the minister whether she could specifically and quickly give us some idea of how she is going to support the following activities: the B.C. Arts Board, the B.C. Festival of the Arts, the Pacific Rim Institute of Tourism and the B.C. publishing industry.

Hon. D. Marzari: Let me update the member on information that I've just received on the Glen Brae house, Canuck Place, in Vancouver. As far as we know, no application has been formally made to the Heritage Trust around this property. Some discussions have taken place with ministry staff to determine whether or not the site is eligible for any of our various programs. We're looking forward to receiving an application. I shouldn't say that. Heritage Trust would undoubtedly want to see an application, and if it complies it will go on the list that Heritage Trust deals with every year. Our staff and cultural services branch will continue to provide assistance where it's required.

On my plans for the various councils, boards and agencies which come under the purview of Tourism and Culture.... I believe I spoke this morning at some length on the Arts Board. B.C. Arts Board has a good reputation in this province and seems to be well respected by artists and agencies alike. It has been operating with a group of about 14 people appointed by government, who basically make their decisions based on review panels that are established to review the individual artist, performing arts grants, dance, music, theatre, etc.

It has been, to this point, what is called in the ministry a wrist-length board, meaning that occasionally decisions have been made which are not necessarily the decisions of the peer review process. It is very strongly felt in the artistic and cultural communities that we have to establish rules and regulations to make ourselves consistent with the Canada Council and certainly bring ourselves in line with what other, more progressive provinces have done, to refine and define and hone the Arts Board into a true arm's-length board. At present the Arts Board's funding is $11.4 million, and that's for the grants it distributes.

One of the first things I did on coming into this job was to ask the Arts Board to do a review of itself and review the Ontario model and the Ottawa model, the Canada Council model, the chair of which -- I must correct myself from this morning -- is Allan Gotlieb. Ms. Jocelyn Harvey is an assistant director of the Canada Council, and that was the person with whom I had my conversation.

When I asked the Arts Board to do a review of itself, we did not go out for a fancy consultant or ask for a special mammoth report to be written, and it is within the parameters of a study that the Arts Board has structured for itself that the Arts Board and the cultural services branch are in fact developing a business plan and a prototype agreement about how it wishes to be perceived.

In the next six months, as we go through this business plan and refine it, this ultimately will become the B.C. Arts Board. Hopefully, it will have its own

[ Page 2363 ]

legislation and will be its own body. I believe that as this province evolves to a more sophisticated cultural policy and a more sophisticated attitude towards culture and the arts, it will be better serviced by a body such as this. It will be its own trust, so to speak.

The next body the member asked me to speak about is the B.C. Festival of the Arts. I had the special privilege of attending the Festival of the Arts and opening some of its activities last week in Vernon. This province has a great deal to be proud of in the Festival of the Arts. It's an event that brings together the talent of young people around the province once a year. It concentrates the young dancers, singers, musicians, orchestras, performers and theatre people, and gives young people a chance to mentor each other, look to their peers for inspiration and to be adjudicated by respected professionals in the field. It is also a visual arts gathering place.

I must say that the curling rink in Vernon last week was one of the most splendid art galleries I have ever had the privilege to be in. It was a beautifully mounted show of work that has been done by artists throughout the province over the last year. It was adjudicated, and awards were given. It was a well-done, highly professional show, which the staff should be commended for.

This government has everything good to say about the B.C. Festival of the Arts. Its funding in this year's budget for next year's program has been protected at $800,000, and we will continue to encourage the B.C. Festival of the Arts to work on its inner administration. Some difficulties have evolved as it grows to an adolescence, if you can call it that, but it's working well. The five groups that sponsor it are working well and are constantly coming up with good ideas. I am in touch with those people and want to see them build its infrastructure in a way that everyone can continue to work together.

The third area the member talked about was support for book publishing. The ministry has a number of programs that support publishing. In fact, we in B.C. do very well in publishing. I believe we have 57 or 58 different publishing companies in British Columbia, which is far more than most provinces. After Ontario we're probably the second-largest publishing province in the country, which comes back to my suggestion this morning that our artists and writers are the ones who are helping save this country and helping define what the constitution should ultimately say about the future of arts and the artists and the country.

We have a $450,000 publishers' grant allocation, which services the industry by injecting money into the infrastructure of the book publishing business. We will have a similar amount this coming year. The $450,000 will not be cut back. The applications that come forward from publishers are reviewed by an advisory committee that represents the whole publishing industry in this province. We also provide an annual operating grant to the Association of Book Publishers of B.C. We will continue that grant.

We support annual B.C. book awards, programs that assist literary periodicals, involvement in the western magazine awards, assistance programs for individual writers and a scholarship program that includes awards for literary merit. I believe we also have a Writers in Libraries grant program, which provides community writers a chance to apply through their libraries for a small grant. Many of these grants are very small, but they do provide some assistance to creative writers and publishers in our province.

[3:15]

The last agency that my ministry is responsible for that the member asked about was PRIT, which stands for Pacific Rim Institute of Tourism. This year the grant to the Pacific Rim Institute is $380,000. The Pacific Rim Institute is basically developing a training blueprint for the Tourism ministry.

Tourism cannot come into its own unless it has got quality service. Service cannot be quality until we are encouraging the profession of tourism and developing an ambition in young people to think about tourism as a career. The Pacific Rim Institute is doing that and developing a blueprint for action around training and developing mechanisms to upgrade quality of service through education and talking to school kids, setting up an expo, which they did a few months ago downtown. Hundreds of school kids from around the province came to look at what was available in tourism down the road.

We believe that this is a very good investment. In fact, the federal government has partnered with us in establishing the Pacific Rim Institute of Tourism. Its board is hard-working and has an excellent staff that operates out of Vancouver. We are looking forward, in a few weeks' time, to unveiling the blueprint for action around tourism training.

C. Tanner: I appreciate the thoroughness of the answers that I got. I have to be a little careful here, because I don't suppose it is a secret that I've been involved in the book business for the better part of 25 years. I have some very strong feelings about what's happened to the book industry in this province and in this country. I'm not always sure that both federally and provincially we follow the right course.

One of the things that I've always been concerned about is that authors and artists sometimes are neglected because they don't make themselves known, or because they can't find their way through the labyrinth of bureaucracy to get to whomever to get some support to continue to do their artistic endeavor.

In that respect, I was wondering whether there has been any review at all with regard to the amount of money that is allocated to publishers

vis-�-vis the amount of money that is allocated to authors.

Hon. D. Marzari: The $450,000, which was a grant in 1991-92, remains. This was a grant straight to the publishers allocated, as I said, by an advisory committee that I trust. The book publishers of B.C. are very much involved with the allocation of these grants. The book publishers know who's having troubles and who needs to be bolstered. It's very important to us to use this $450,000 to bolster our publishing industry. It is also very important for us to be conversant with the federal regulations and new supports or distractions from the support for book publishing that are coming down from the federal government. We are keeping a

[ Page 2364 ]

watching brief and occasionally making phone calls or visits to the federal Minister of Communications and Culture on these issues. The book publishers in B.C. are, as I say, looking closely at what happens to the constitutional language and how we hold the country together. That's one of the things that I'm involved with them on.

C. Tanner: I suppose because I feel a certain delicacy in this matter, in that my wife derives an income from it, I was probably being too delicate, and the minister misunderstood my question. I am sorry. Let me be very bold and blunt about it. It is my view that rather than giving subsidies and help to publishers, the federal and provincial governments would do better to give money to the artists, to the authors. In that respect, I think the money would be better used. I think the industry would become more competitive, which it needs to be.

The government would spend its money more rationally, and I suspect the results, in the long run, might be better than what we're experiencing now. Could the minister comment on that?

Hon. D. Marzari: We're actually doing both at the present time. There is project assistance for creative writers in the province, and that total comes to $100,000. But I take the member's suggestions seriously. It is certainly something that should and can be discussed both with the book publishers and the authors.

I do not want to set one against the other, because both depend on each other, but I must say that distribution is a major factor in Canadian culture -- distribution of film or books -- and before any decisions were made around the reallocation of these dollars, I would want to know the impact that it would have on the ability of Canadians to read Canadian material. That is, if anything in this day and age, in this very year, of utmost importance.

I will take the member's suggestions very seriously. I will discuss these with the industry itself and see whether or not we can continue to do both and continue to do both better.

C. Tanner: Madam Chairman, by any reasonable standards any civilized and cultured person would know it's teatime. As a consequence, I would point out to the minister and to everybody else that I've got no more questions.

Hon. D. Marzari: Just to bring up to date some of the questions that have come forward, may I read into the record that the total revenue from museum admissions in 1991 was $1,742,959. How much are kids spending to get into the museum? In the '91-92 fiscal year, 48,393 children from B.C. schools got in free; 16,591 children from out of province got in for $1. That raised the obvious amount. In '91-92, six-to 18-year-olds generated $55,669. So the total direct fees for 87,319 children was $72,260. We sold 84,823 family passes for revenue generation of $1,017,000. Each family pass allows unlimited visits by two adults and any number of children. These are numbers I want to put on the record.

We canvassed the issue this morning. The issue is, obviously: should a museum, which is a reflection of the continuity and the heritage of a community's past, be charging money in the first place, and does it really contribute massively to the operating costs of the museum? At this point, at $1.8 million, the revenue is generating a substantial chunk of the operating costs of the museum.

As I say, it's a difficult decision, to say that should be turned off. My position, and the position of government, is that ultimately we will turn off that revenue stream. In the meantime, however, there are capital adjustments -- additions and new projects -- that the museum very much wants to see. Although the museum has a very active Friends society that works on its internal operations and a very active fund-raising society, we are not in the position where we can say this is a museum which is living up to the expectations and the aspirations of the community that it serves.

I want to see that happen ultimately, and perhaps we will look at slightly more innovative ways of funding the museum over the long haul.

[3:30]

C. Tanner: Thank you to the minister for giving us those figures from this morning's debate.

Just wrapping it up from this side of the House, I think I can tell the minister and her department that as far as this member is concerned, he is satisfied that the minister is doing a far better job than her predecessors -- in plural, because there have been all sorts of them in the last five years. In this respect the government is doing better than the last government, as far as I can see so far. There is a definite improvement.

I appreciate that the minister has worked hard in her department for the last six months. However, I do have one improvement to suggest, and that would be in about four years' time, when I sit in her seat and she sits in mine.

Vote 58 approved.

On vote 59: ministry operations, $58,734,000.

Hon. D. Marzari: Vote 59 covers ministry operations: administration and support services, cultural and historic resources and tourism. It is basically the operating budget of the ministry.

Vote 59 approved.

ESTIMATES: MINISTRY OF FINANCE

AND CORPORATE RELATIONS

On vote 35: minister's office, $325,213.

Hon. G. Clark: Hon. Chair, I'm delighted to make a few introductory remarks, which I think would serve to summarize, for the benefit of the committee members, the 1992-93 estimates of the Ministry of Finance and Corporate Relations.

The estimates for the ministry operations comprise six votes. Vote 35 is the office of minister, as we're

[ Page 2365 ]

debating. Vote 36 is for the operations of the ministry's nine divisions.

Registries and ministry support services, as you know, has temporarily been assigned to the Ministry of Government Services. For the purposes of the members opposite, they may want to ask questions about that, because they were denied, essentially. It may be difficult to ask questions of the Minister of Government Services. Second, Treasury Board staff; third, economics and policy; fourth, government personnel services; fifth, planning and statistics; sixth, office of the comptroller general; seven, revenue operations; eight, financial institutions commission; and nine, the TRIUMF-KAON project office.

Vote 37 is a $10 vote for the operation of the Crown corporations secretariat, which means it's fully cost-recovered from the Crowns. Vote 38 is a $10 vote for the disbursement and recovery of pensions and employee benefits contributions. Vote 39 is for contributions to the B.C. Ferry Corporation, and vote 40 is contributions to B.C. Transit.

I'm also responsible for vote 64, which is in a different place in the estimates book, for management of public funds and debt; vote 65, which is contingencies and new programs; and vote 66, which is the government accounting systems strategic plan, better known as GASSP. These three votes are shown at the back of estimates under "Other Appropriations."

The total expenditure requested for ministry operations in votes 35 through 40 amounts to $366.97 million. As well as funding in votes, the ministry operates self-sufficient programs through the following five special accounts.

British Columbia Securities Commission. This special account provides for the operations of the commission and the cost of administering the Securities Act and Commodity Contract Act. Fee revenue is obtained through the industry and is credited to the account, and expenditures related to operating the commission are charged to the account. That account is fully cost-recoverable, so the securities industry essentially pays for the Securities Commission in British Columbia.

The provincial home acquisition account is also governed by my ministry for the purpose of paying grants to British Columbia residents obtaining a home and to make loans secured by second mortgages. In June 1989 most of the second mortgage portfolio was sold to the private sector.

Provincial treasury operations is another special account. This special account provides for the operation of the provincial treasury including investment, debt management, banking, cash management and loans administration services to its clients. The provincial treasury's expenditures are charged to the account, and fee revenue earned from clients is credited to the account.

Provincial treasury revenue is another account. This account provides for net revenue generated from various financial agreements managed by the ministry to be credited to the account. On balance, as you know, there is a very large surplus in those accounts because the fees charged are generating significant revenue from an outstanding staff in the Ministry of Finance.

Finally, the insurance and risk management account was created for the purpose of providing insurance and/or risk management services to the government. Revenues to this special account represent amounts paid by participants and expenditures or costs related to administering risk management services, agreements, self-insurance services to hospitals, schools and colleges, and for the settlement of claims and purchases of insurance. The member should know that the insurance and risk management services provided by government have saved the taxpayers millions of dollars. Again, that's a relatively new innovation in the government of British Columbia.

My ministry's main purpose and goal is to maintain strong fiscal integrity in this province. This is achieved by ensuring that public money is collected, managed and disbursed in the public interest, and that the provincial marketplace is fairly and effectively governed and has the confidence of all who use it.

The Ministry of Finance, which I'm privileged to represent, has historically been the main engine of government in British Columbia. Under the Bennett years the Treasury Board was a very powerful organization, and to this day it obviously retains some of the best staff, in my view -- and I say this with respect, because I'm not sure all my colleagues would agree. Arguably, anyway, it has the best and the brightest staff of government and, in some respects, the toughest. Very rigorous analysis takes place in the Ministry of Finance. I'm very proud to be the minister responsible for that.

In addition, we're trying to expand the scope of the Ministry of Finance operations in order not just to look at narrow expenditure control initiatives, which is of course very important, but to marry that with the broader perspective of the public interest in general and with the kind of policy agenda the government wants to pursue.

In fiscal year 1992-93, there are some other major initiatives that we are reviewing, which I'd like to canvass briefly. One is the pay equity initiative, which takes place under the government personnel services division. Although clearly the lead ministry in this regard is the Women's Equality ministry, the actual nuts and bolts of negotiating pay equity agreements, and most of the work being done, is being done under government personnel services division.

In addition, implementation of the Peat Marwick recommendations is a major task. As you know, we have an internal committee with the comptroller general. My deputy minister and others review that. There are some major recommendations that we are reviewing, which will consume significant energy to implement. They're by and large worthwhile, but we're reviewing them. Provincial treasury is a good example of a place where we can do more. I'd like to see us do more, but in some respects the rules conspire against it in the government right now.

Peat Marwick recommended certain changes which would give more flexibility and more autonomy to agencies like the provincial treasury, without making them Crown corporations and outside the ambit of either this Legislature or in some respects the government itself.

[ Page 2366 ]

In addition, we have enhanced the value-for-money auditing, which is a term that I'm not sure is well-defined. In the literature, it's not a strict accounting technique but one that involves policy and program evaluation. We're reviewing how best to undertake that. There is going to be some resources added to that, because it's obvious there has been no program evaluation, no value-for-money auditing and no zero-based budgeting -- at least, for many, many years in British Columbia. In terms of cost containment, we need to do more with less, and that means we have to look at more efficient ways of managing certain programs.

In addition, we have the Korbin commission initiatives which I could answer questions on. I know that opposition members have been briefed. No reports have been filed by the Korbin commission, but it's a very interesting exercise. They're going through it, and I hope and expect that opposition parties and members of the House will be involved and consulted in that endeavour. It's a major undertaking, because of the convoluted way in which government has developed in British Columbia. We have FTEs and shadow FTEs and contracting in and contracting out. We really need to get a better handle on that side of the equation; in part, so that we can maximize expenditure control.

We're looking at ways in which we can do more with less. That means maximizing some revenues. There is significant leakage in some of our taxes, which we hope to tighten up, not in any draconian way, but it's in all of our interests to make sure that everybody pays their share of taxes. If someone manages to cheat the system or escape taxation, all it means is that those people who are law-abiding, who aren't taking advantage of a loophole or trying to cheat the system, have to pay more, and that's not in anybody's interest.

On balance, we have a ministry of government which has played a major role in British Columbia's history and continues to do so. We do have some very fine staff working in the ministry in all of the areas -- and there are many. As you can appreciate, we did inherit a structure from the previous government which had gone through some changes, as you can see by nine different divisions. It really is a very broad ministry with quite a varied mandate: registries, revenue, Treasury Board, economics and policy. It's in some respects a little broader than some other line ministry functions.

That might be partly the nature of the Ministry of Finance, as a horizontal ministry that deals with all avenues of expenditure and revenue and all ministries. However, it does present certain management challenges.

In addition, as you know, the Premier has assigned to me direct responsibility for B.C. Ferries and B.C. Transit, two heavily subsidized Crowns which we're working on to reduce the level of tax per subsidy. In addition, as the chair of the Crown Corporations Committee of Cabinet, the Crown corporations secretariat attached to that committee reports through me, and through that committee deals with all the activities of the Crowns. We're very optimistic that there is tremendous potential for cost-cutting and efficiency measures in the Crowns as well; in fact, in some cases, for revenue generation for the public through those Crown corporations.

[3:45]

Finally, we do have the TRIUMF-KAON project, the PNE and some other ancillary areas, which I'd certainly be delighted to answer questions on. With those brief opening remarks, I'd be delighted to answer any questions that the members opposite have. Before I do that, let me just introduce the staff that I do have here. On my immediate left is Michael Costello, the deputy minister. Next to him is Pat Jackson, manager in the budgets and planning division of the Ministry of Finance.

F. Gingell: Thank you for that opening statement.

As one appreciates, the role of the Minister of Finance in government is a very important and a very critical one. We are just at the start of the mandate of this government, so as far as the past is concerned, I can appreciate that the minister has a desire to clean the blackboard somewhat and put his own stamp and imprint on the operation of his ministry. I appreciate that he spoke briefly in his opening remarks about the Peat Marwick reports, but if I may I'd like just to go back to them, and maybe we could have some exchange on the issues.

In my mind, there were really four main issues. The first one that Peat Marwick focused on was a lack of planning. You spoke about the number of different departments that report to your ministry, and Peat Marwick focused in some depth on the need for there to be some central, well-organized core group within Treasury Board with an overall role in planning, not just planning for 1992-93, but being concerned about what we do in '92-93 and the effects on '93-94 and so on. This being the important subject that it is, I can appreciate that it isn't something that the minister will delay on, and I would be interested in your comment to that.

Hon. G. Clark: You're absolutely right. Lack of planning and coordinating the policy and fiscal objectives of government is pretty clearly evident. We do have a system now of incremental budgeting, which you can't totally get away from, but it's a bit annoying. Frankly, what happens is that you go before Treasury Board in the budget process which we inherited from the previous government, your base budget is protected and you're applying for further funds for either enhancement, maintenance or new programs.

You focus all your attention scrutinizing the incremental budget items, and meanwhile you have big ministries like Health and Education which have huge budgets and really go unexamined, at least in a major way. So you're absolutely correct, we want to enhance and improve the budget process and enhance the planning capacity both of the Treasury Board and of the government generally in terms of marrying the policy and fiscal objectives. We're working on doing that.

F. Gingell: During my short time in this House playing a different role in life to what I've done in the past, one of the things that has really struck home is the

[ Page 2367 ]

size of government: the size of provincial government, the size of the federal government, the size of the municipal and regional governments, and how all these four levels of government -- five if you want to include school boards -- really overlap, and the costs that taxpayers incur because of this.

During the minister's opening remarks he said that it was very important that we learn to do and struggle to do more with less. Actually your subsequent reference was to revenue collection, but I think it was intended to be more in the field of expense control. Has the government and your ministry given any thought to the question of shrinking government? It's a subject that is close to my heart, as you know.

Hon. G. Clark: Your friend -- and I was going to say and mine -- the former minister, Mel Couvelier, at a federal-provincial conference for Finance ministers, actually managed to engineer a major analysis called "Overlap and Duplication." I don't believe that it has actually been published yet, but it may be coming out soon. Obviously we've been a party to it.

Unfortunately -- certainly for the member opposite and, in many respects, for me as well -- the conclusions of the study, which all provinces and the federal government participated in, did not say that there would be significant savings in our federal-provincial system; in fact, they said rather the opposite. They said that while the federal government has a ministry of the environment that spends a lot of money, it has tended to focus on niches which were not filled by provincial ministries of environment.

So even though there are two big ministries of the environment operating in British Columbia, with lots of staff and money, and intuitively you might think that it would be better to have one, the cost savings of doing that aren't nearly as significant as you might think. In general, that is the result of this major analysis.

However, there are some cost savings. I don't want to be blanket about it. I'm very concerned about it, and I've raised it at federal-provincial meetings in a general sense and in a constitutional sense. I think that some changes may come out of this constitutional discussion which may deal with these problems and make sure that the accountability is where it should be. One of the problems with this overlap and duplication is that the taxpayer doesn't know who's responsible.

If it's the Ministry of Environment, constitutionally it's the provincial government, so people should quite appropriately ask the provincial government, or complain to that government, about environmental questions. Yet there is a large federal government presence in that field as well. I think that confounds our system of democracy, and we really need to make that much cleaner.

In a general sense, any overlap or duplication within the government of British Columbia is a great concern of mine. I think you're correct, we have to do better. As part of this budget cycle, rather than just reviewing the incremental budget, we'll be looking at people's base budgets for overlap, duplication and cost savings.

It is a tough area though. We have intractable social problems which, by their nature, cross boundaries of ministries. If you deal with children in poverty, for example, you have to deal with the Ministry of Education and the Ministry of Social Services. In many cases you also deal with the Ministry of the Attorney General. In some cases you deal with the Ministry of Health in terms of maybe alcohol abuse or the like. So you end up setting up committee after committee -- interministerial committees, they call them -- of officials and the like to try to deal with complex social problems.

I find that frustrating, to be candid, when you want to get a job done, because these various ministries overlap with each other, and it becomes extremely difficult.

We're working very aggressively on ways in which we can streamline those processes but still involve the major players. I'm fairly optimistic that we can do better than we have done, but I'm not as optimistic as I was before I got elected about how complex these challenges are. We're certainly working on it.

F. Gingell: The minister spoke about the need to do zero-base budgeting for the development of budgets and how in the past they had been developed and prepared on an incremental-budgeting formula or methodology. Could you advise what method was used for your 1992-93 budget and whether you plan on ensuring that that is changed for '93-94?

Hon. G. Clark: The process is under review, and I really can't say right now what the shape of the budget process is going to be, but I hope to do that. I think it will become clear. Any jurisdiction that has tried zero-based budgeting every year has really failed because of the enormity of that task. What we have to do is devise a way of perhaps doing cycles of reviews of ministries and looking for fruitful areas of cost savings and efficiency gains. We're going through that now. The exact process will become clear as the year goes on, but we haven't made any firm decisions.

Certainly no decision has been made regarding how we're going to proceed, but we've narrowed it down to a range of options.

I think and hope that when we come before you next year, I can explain in more detail -- or certainly if there are public announcements made -- about how we intend to proceed. The current system is not acceptable for another year, and that won't take place. Trying to go to a pure zero-based budgeting system is not going to happen. It is simply too expensive, too difficult and too onerous. Somewhere in the middle where we're doing more proactive reviews of base budgets, in addition to some tougher guidelines and scrutiny about future spending, is probably where we will end up.

F. Gingell: In looking at the Peat Marwick report, there was also a major focus on the need for the integration of all the accounting systems within all of the various government ministries, agencies, Crown corporations and boards. I was wondering if you could speak about that for a moment, and also deal with GASSP, I think it's called, and whether those two things are the same.

[ Page 2368 ]

Hon. G. Clark: Yes, they are really the same. The corporate accounting system that the government uses is outdated and antiquated. As we've said, there are, I think, 79 accounting systems in government with the advent of computers. They don't talk to each other, they don't use the same software, and frankly, it's almost scandalous that the government could operate this way. Having been in this position for a while, I can sort of see why, because to fix it is extremely expensive.

As you know, in this budget I believe it's $5.9 million just for the first phase of the GASSP program -- the Government Accounting Systems Strategic Plan -- for this year. That, in a tough fiscal environment when we have competing demands for funds, is difficult to swallow. We've done that. I'm actually very pleased that we've done that. It will consume more resources next year and the year after that, I believe, but once it's up and running, there should be significant cost savings and certainly efficiency gains in rationalizing the accounting systems of government.

The comptroller general is, as you know, seized of this matter. It is expensive. We're using private sector consultants. I would be delighted, if the member hasn't done so, to make sure that he is fully briefed on where they are moving. It's, as they say, Greek to me -- the accounting systems of government. I'm not sure, but Public Accounts may, in fact, be reviewing this. That would be worthwhile, because it is a bit of an arcane world. We could certainly benefit. I think I would benefit and the public would benefit by more debate or discussion by learned people like yourselves on this subject.

We're very optimistic that with a few years of these kinds of expenditures we can in fact rationalize accounting systems in the British Columbia government, and thereby improve cost savings, efficiencies and probably accessed information for members and for the public.

[4:00]

F. Gingell: You indicated that 1992-93 was the first year. I quickly went through the estimates and couldn't put my finger on it. I was under the impression that it was the second year, and I was wondering if you could advise us if there is any view of the total cost of this program and how many years it will take to come to fruition.

Hon. G. Clark: I'll just try and get that information for you. Sunny Mathieson has come in. Unfortunately the comptroller general and some other senior staff are at a major retreat for senior financial officers in government, dealing with precisely some of these questions as we speak. Ms. Mathieson will review it.

You're quite correct that last year the government spent $3.3 million on GASSP. This year it's $5.9 million. This year there is a pilot implementation project currently underway in two ministries of government that have a real need in this regard.

I'm just checking to see what the total cost of the project is. I'm a bit suspicious. These accounting and computer projects tend to cost slightly more than they usually estimate. Nevertheless, as Peat Marwick pointed out, it's really endangering the ability of the government to function. At some point you simply have to invest in that kind of needed infrastructure.

The total estimated costs are $14 million. This is the third phase of this initiative. Money spent to date on the GASSP project is $5.9 million plus $3.3 million. We still have next year. You can anticipate further spending.

I want to be candid with you that I'm not agreeing now in the House to exactly how much we'll spend next year on this project. We do have a very tough environment again. It may take slightly longer to complete this project than, I am certain, the comptroller general or my staff would like, faced with the pressures of the day. We certainly plan to complete it as soon as possible.

We continued funding this year in spite of the environment because of the problems we face as government and the Peat Marwick recommendations and because the project had already gone through. This is the third year. It was really false economy. The division completed the second phase of the project in 1991 and recommended the software solution after an independent investigation and evaluation. This is the third phase. We're starting with a pilot implementation project for a small part of the government accounting function, and then we can expand it from there. We're certainly committed to doing it.

It makes sense, but it will also save money on the long run. I'm just babbling a little bit. I'll get the information.

The total cost for GASSP is expected to be $17.5 million. The total efficiency savings is expected to be $14 million. The net cost to us is supposed to be $3.5 million. That's the independent review. This has gone through rigorous analysis. While we're spending money, we know we will save money when the project is complete. As I say, I can't predict exactly how long it will take to complete. We'd certainly like to complete it in another year, but it may take a couple of more years to get fully operational.

F. Gingell: Just dealing with this one last time, it seems to me, listening to you now and subsequently finding out what is happening with GASSP, that Peat Marwick's criticism was a little unfair in that the provincial government had already started work. They had a clearly defined program. They were moving along on it. Do you think that is fair comment? Do you think that many of your senior officials, who are working on this and have in past years, felt a little hard done by?

Hon. G. Clark: First of all, I'd say that a lot of staff felt hard done by by the Peat Marwick report, because it was critical of many aspects of the way government operated. In this case, I don't think you're right. I think Peat Marwick demonstrated that the comptroller general was absolutely correct, and -- if I can be candid -- it probably helped me persuade my colleagues that we should continue to put resources in this area.

I think the criticisms of the systems were absolutely accurate, and those were criticisms that the comptroller general had already identified, by and large -- although perhaps not as amplified. While they were working to rectify it, every year they had to come before Treasury Board and get approval to spend. In a tough year that might be

[ Page 2369 ]

difficult to do. I am, of course, delighted that we managed to convince Treasury Board because, as you know, unlike other Treasury Board decisions, that's one I don't get to participate in, and I think that makes a lot of sense.

If I can clarify the record -- I think my staff said that the savings is expected to be $14 million a year. The total cost of GASSP implementation -- my recollection is a little different -- is about $20 million. That's probably realistic. One of the reasons we could sell it, of course, is that not only does it make sense, but it makes economic sense as well. Nevertheless, you're still dealing with those expenditures, and it's tough to squeeze $5 million or $6 million out of Treasury Board.

F. Gingell: All of the improved procedures and accounting systems and the standardization of accounts so that they become clearly more understandable are not going to have the necessary results unless we do one simple thing: change all the year-ends of all the various organizations to the same year-end. In businesses we tend to look for a year-end that is the end of a natural cycle, but the provincial government works on a March year-end and always has. When we look at the public accounts, many of the Crown agencies have December year-ends. It really does confuse the issue. I wonder whether a decision had been made to make those changes and what your thoughts are on that subject.

Hon. G. Clark: No decision has been made, and, to be candid, you're the first person who has brought it to my attention as a concern. I think you make some good arguments. I'll certainly review that. I think it would make sense to have a common fiscal year where possible. There may be peculiar reasons for some of them. I don't know, but certainly I'll investigate it.

F. Gingell: Another of the items that concerned Peat Marwick, and the third of the four subjects that I wanted to focus on, was what they described as lurking expenditures -- costs of land claims and all kinds of various commitments that the province has made. They make a commitment in one year, and they don't really worry about it from that point on, but the costs go up and up. The Vancouver Island gas pipeline is perhaps a good example of that. I'd like to ask the minister whether any work has been done on a thorough review of all of the various matters in which the province is involved for the purpose of getting some kind of feeling or delineation of the size of the problem.

Hon. G. Clark: Certainly that is one of the things being investigated by the committee in my office which has been charged with looking at the Peat Marwick report. You're quite right. It's hard to quantify some of these. Land claims is a good example. The VIGas project is an excellent example. The problem with VIGas is that it's really predicated on the price of oil, and you have to make certain assumptions. Mind you, almost any assumption is a bit frightening, given that project. So we are cataloguing those. We're reviewing them. We have to come to grips with how we're going to deal with them.

We will certainly make that information available to the public so they can participate. In the abbreviated budget process last year we tried -- I tried, at least, with my officials -- to convince people of the state of the financial affairs of the province, not for partisan purposes but because we simply have to do a better job of informing people of the situation so that people can at least, if they.... They can criticize me if they like, and I don't have any problem with that, but we really want to make sure that everybody has the same information base.

These lurking expenditures.... By the way, I thought it was quite a clever phrase, not one usually expected from an accounting firm. I think it is a very serious problem for all governments, because they tend to focus on three-or four-year time horizons rather than on some real problems.

Another expenditure item which I'm dealing with almost daily is B.C. Transit -- which we may get to. It is quite frightening in terms of the costs of SkyTrain extensions which were decided upon and are virtually built now, but for which the bills come due in the next year or two and for which there is no budgeted appropriation. They're extremely expensive items.

I guess as a politician one has a temptation to build something today that someone doesn't have to pay for for three or four years, on the assumption that I might not be there and whoever's there can deal with it; but it's clearly not very good public policy. We faced it a lot under the previous administration, and we're looking at some of those problems now.

Trying to get a handle on all future expenditures is a major undertaking that we're certainly beginning -- just beginning, really -- to do the work on.

F. Gingell: Not exactly in the field of lurking expenditures, but we do carry on the books of the province a whole series of what I'd like to term at the moment "accounts receivable" that will be paid by future grants from this same government -- a grant from the government to the hospital authority or the school board or the university, which in turn will pay it back to the fiscal loan agency to make payments on their long-term debt.

I must admit, from a practical point of view, that I'm satisfied in my own mind that all these debts deal with buildings that have been built and equipment that has been purchased, things that have a long life. However, the auditor general has brought this matter up in his report, and it is a subject that has been considered at some length by the Canadian Institute of Chartered Accountants. who have made certain pronouncements and recommendations.

I wondered whether your ministry was planning any change in the presentation of the financial statements for the year ending March 31, 1992, which we expect at any moment.

Hon. G. Clark: We're reviewing the whole question of capitalizing expenditures. I guess the question is.... It is tax-supported debt, these financing authorities. No one pretends otherwise. The rating agencies certainly understand that this is debt carried by the province. We have no ability to pay it back except as a

[ Page 2370 ]

result of appropriations from the government. But I think there is some merit, philosophically, to this notion: you don't run deficits for consumption today; you don't deficit-finance for consumption. But for a school or hospital, which lasts for 25 or 40 years, it's quite appropriate for future generations to pay a share of that if they take advantage of it. On that basis, I'm quite comfortable with the financing authorities.

The only question the auditor general dealt with was: should we move the debt from indirect debt to direct debt? It wouldn't affect the deficit in any way. It wouldn't affect very much. It's just a matter of saying that it's not really indirect debt, because it's taxpayer-supported debt, and it should be freed up as direct debt. We're reviewing that. I don't think it's a big issue in the minds of the public, to be candid. I don't think it's a huge issue in terms of reviewing it when we look at other provinces. The fact is that everybody knows it's taxpayer-supported debt, unlike the previous government.

I've certainly not tried to hide that. I think everybody knows that. Philosophically I'm comfortable with the rationale.

[4:15]

The question that arises, which I'd be interested in the member's comments on -- not in the House but at a future date -- is whether we should capitalize highway spending in the same manner. The same principle applies if you're building a major road. If you're going to drive on it for 30 or 40 years, then you could apply the same principle. You could also apply the same principle to silviculture costs. These are expenditures for which you expect to get a return. In that case, there is a return, but it's 80 years hence. You could make a pretty good argument along the same lines.

The downside is that debt service eventually costs what you might pay if you did a pay-as-you-go approach and crowds out the ability for government flexibility.

It is an interesting area. I would certainly welcome any member's input on that, because we are actually reviewing it as we speak.

F. Gingell: The fourth item that I wish to briefly focus on from the Peat Marwick report is the question of revenue collection. That is one area where your staff were subject to a great deal of criticism. I wondered what action you have taken with respect to that particular subject.

Hon. G. Clark: I think most of the criticism was fines and fees, which aren't really the Ministry of Finance; perhaps they should be. We are reviewing that question as well. A lot of the criticism was around, I think, traffic fines, which are administered by the Attorney General's ministry.

We do have a loans administration branch, a fairly new creation that is doing an outstanding job. The marginal return to the government for each additional loan collection officer is about $600,000. That will presumably go down as we hire more. That is a fairly new creation -- a couple of years old. There are very capable staff doing an excellent job recovering moneys from, say, student loans. Very often when the student or ex-student is phoned up they are surprised that they're supposed to pay this back. They didn't realize that. When they're informed that they're to pay it back, they pay it back. We are doing extremely well in recoveries.

The fees and licenses are by and large administered by the individual ministries. The traffic fees, which was a big problem.... The government as a whole and the Ministry of Finance are involved in a review of that. At this moment the responsibility lies with the Ministry of Attorney General. I know that they are working hard on a project to do a better job than has been the case in the past.

F. Gingell: Without my going back to the Peat Marwick report, because I didn't bring it, it seemed to me that as well as those things it dealt with timber royalties and a whole bunch of other subjects. From memory, I thought there was a very strong recommendation in the report that all those collection functions be concentrated or focused in one staffing under your ministry. Could you respond to that?

Hon. G. Clark: Not surprisingly, I'm sympathetic to the view that we should centralize some of the collection functions. The trade-off is that the line ministries are often the interface with industry. Forestry is a good example of that. There is a sense that the industry which is paying the bills should be serviced by the ministry that understands that business. I hate to keep saying this, but in fact it's the case: we are reviewing these questions. I'm sympathetic to centralizing them.

I think there are some efficiency gains, but there may be some problems with industry particularly in having what they might perceive as tough, mean accountants in the Ministry of Finance doing a job which traditionally has been done by people who perhaps understand the industry a little better. That's certainly the argument that we're receiving, and we'll review it.

I think the Peat Marwick report has indicated that there are problems in collecting in those line ministries. The Ministry of Finance does a better job, and can do a better job. It's not clear that the solution has to be that we centralize in Finance; it may simply be that we need to enhance the capacity of the line ministries to collect and to work with Ministry of Finance officials in some way in which we can do it more efficiently but still retain the interface between those ministries and the corporate sector. Mining or energy are other good examples, as the member knows.

In terms of the Ministry of Energy, it has always been the agency that deals with those questions. We're reviewing it. I'm very interested in dealing with it in a way which enhances efficiency. I know government generally is, so there may well be some changes, but at this point no changes have been made.

F. Gingell: While we're on this subject, Peat Marwick also recommended that we have a consolidated computer system set up for use by the loans administration branch for integration with the loan portfolio system of program ministries, and eventually integrate it with the entire program ministry systems.

[ Page 2371 ]

Are we moving towards that, or are we presently staying with separate electronic fiefdoms?

Hon. G. Clark: We are reviewing loans and administration. I'm just advised that there has been a loan program which has been transferred to the loans administration branch. In my view, that's the appropriate mechanism, but obviously we have to move slowly, in consultation with the ministries affected. We do have an odd situation. It's not odd, but the ministry gives out the loan, and then says, "Oh, here, you administer it now." Sometimes that isn't particularly helpful either. It would be nice to have one centralized system.

This is sort of what we're moving towards to deal with any loans administration, and to have the loans administration branch consulted before loans are given out, so the appropriate security is taken and the like. That is where we're moving, I think. There has been significant progress to date. We're going to continue over the next few months.

F. Gingell: Dealing with the subject of loans, it always seems to me that if the province provides financial assistance through the means of guaranteeing a bank loan, we tend to get the worst of both worlds. I appreciate that the banks are required to monitor them; they are required to report. I'm sure there's a system set up to make sure that the process works, but it never really works quite as well when it isn't your own money. I was wondering whether the ministry has any policy with respect to the future of matters such as student loans and other loans that may be made. Is there a policy developing to move away from bank guarantees and into more direct loans from government?

Hon. G. Clark: I think it's fair to say that that's really been our experience. Loan guarantees tend to have less diligence applied to them by the agency giving the loan. The downside to us giving loans directly is that we have to borrow a whole bunch more money to do that. But you're right; in the past loan guarantee programs have perhaps not been as well handled as they might be. My hesitation at this point is to give you a blanket statement that we should do more lending but not loan guarantees. I agree with you that there is a problem, but there may be an array of solutions that we can deal with.

Ideally, from my perspective, we'd like to make the banks or the private sector institutions share the risk. Any risk that they would be exposed to at all would enable us to make sure that there's due diligence. That's kind of challenging, because you're either guaranteeing it or you're not. The problem is correct, but the solution is not self-evident. We have to look creatively at all of the options that are available.

F. Gingell: During the Peat Marwick study, while they were doing their work, they seemed to have reviewed a whole series of loans that were held in various government portfolios and recommended that in 1991-92 the provision for bad debts.... I'm not sure whether the provision for past loans and guarantees that were either bad or were going to be called in was increased to $316 million or increased by $316 million. The message that came out was that almost 50 percent of the loans made to businesses had gone bad or were expected to. When we look at your estimates for 1992-93, Mr.

Minister, our calculation comes to a provision of roughly 15 percent of the amount of the loans that will be made in this current year being provided for in the form of a loss provision. I wonder why you feel that all of a sudden things are going to get so much better under your jurisdiction.

Hon. G. Clark: First of all, the real problem was the ad hoc loan program, which was by and large politically driven. I don't say that in a really pejorative way. In fact, it's just that they didn't come through the normal bureaucratic route, did not have the checks and balances that that entails and tended to be large dollar amounts. We haven't engaged in that. I'm not saying that we would never exercise the right of government to intervene to try to help a community and the like. We certainly haven't done so, and we're reluctant to do so.

The Cassiar experience demonstrated to everybody that we're not prepared to throw money at a problem unless it makes good business sense. We're still hopeful, of course, that that may work out very well for us. So if we're not giving the magnitude of loans that the previous administration did, we're not vulnerable to the same kinds of losses.

I would like to ask where you got the 15 percent, because that doesn't ring a bell with me or my staff here.

F. Gingell: If I may, I would like to reverse the question, because I got it out of this piece of paper, which I'm not sure means a great deal. I'd be interested to know what your provision is for the year 1992-93.

Hon. G. Clark: The loss provisions -- any provisions -- are distributed by ministry. There's a provision in the Advanced Education ministry for student loans, a provision in the Economic Development ministry.... To be candid, I don't know the total amounts. We can provide that for you, but we have to go through each of the ministries and give you the amount that we're providing this year for the coming year.

F. Gingell: I was wondering whether you expect the comptroller general to be here, or whether he's going to be away for a day or two. I appreciate that we mustn't let things go, because obviously this session of the thirty-fifth parliament is shortly coming to an end. You assured me, Mr. Minister, in a private discussion that your estimates would come up right at the very end, so I presume that when we finish these tomorrow or the day after, the House is going to be prorogued.

Hon. G. Clark: Sunny Mathieson, at the end of the table here, is the acting executive director of the internal audit branch of the comptroller general, and the most senior person available today. I think she, my deputy minister and other staff here are competent to answer any questions you might have. If you prefer to

[ Page 2372 ]

wait for the comptroller general to come back, we could do so, but I honestly think we could deal with almost all of your questions. I prefer to try to do it today. If some questions are not answerable, we could do that on another date or provide answers for you later.

[4:30]

[R. Kasper in the chair.]

F. Gingell: This question has been asked in little pieces, really. I'd like to, if I may, put it into one area. You appreciate, Mr. Minister, that the auditor general has qualified our financial statements for the past three or four years. It is a subject that has been discussed in the Public Accounts Committee, as you can appreciate. Clearly they have responsibility. I wondered whether, when one considers all of the factors involved -- and it seems to be a fairly simple solution -- you intended this year to have the comptroller general prepare the financial statements of the province in a manner that will not cause the auditor general to make a qualification.

Hon. G. Clark: The answer to that is yes. I'm not sure whether it has to go through a few more hoops in government, but certainly it's my recommendation to change the financial statements to show the liability so they won't be qualified.

F. Gingell: The report of your ministry which finally came out yesterday speaks of the electronic data interchange with major suppliers. It was anticipated that that would be functional and in operation right now. I wonder what the latest status report is on that.

Hon. G. Clark: That's correct. We have a pilot project underway with an oil company. In this day and age, if we can pay the bills and deal with invoices through electronic transfer, it does save us staff time and expenses, and the suppliers, I think, will like it. I fully anticipate that it will be coming, but this year we started with a pilot project.

F. Gingell: If I may, Mr. Minister, I would like to move on to the subject of government personnel services. I was wondering if we could start off....

Hon. G. Clark: Mr. Chair, it's not appropriate to ask questions on this. Would the member be so kind as to inform whether he has more questions about the comptroller general? If he does not, then I'll ask Sunny Mathieson to exit, and I'll bring in someone from the government personnel services division, if that appears to be where you're moving towards.

F. Gingell: Yes, except that I'm looking around for the third party caucus. I wonder whether they were going to ask some questions at this time.

An Hon. Member: That's going to be very difficult if they're not here.

F. Gingell: Very difficult when they're not here.

Perhaps before the lady from the minister's office leaves, I have one question. Could you advise us what has been happening with respect to investors in the failed Principal Group since your appointment to the position of Minister of Finance? I would also be interested in knowing where that shows up in the accounts.

Hon. G. Clark: An excellent question. It gets more complicated. I'm not sure how familiar the member is with the arrangement between investors in Alberta, British Columbia and Nova Scotia to recover funding. If the member is aware of the pooling arrangement between Alberta, British Columbia and Nova Scotia, then it would be easier for me to explain what we've just done. I'm not sure how up to date you are.

If I can assume that you understand that, we have just agreed to expand.... The new NDP government in Saskatchewan has decided to compensate their investors. They're the only ones who weren't part of the pooling arrangement between Alberta, British Columbia and Nova Scotia. We have just decided to reopen our settlement offer until July 31, 1992, to provide more British Columbia investors with a final opportunity to file for compensation.

The arrangement was that first Alberta decided to compensate, and they compensated quite generously, including compensating some British Columbia taxpayers and investors. When the previous administration in British Columbia decided to compensate, the arrangement was that they would essentially compensate all investors, regardless of whether they were in British Columbia. In other words, any provincial government funding would go into a pool to be divided up among investors, because of the shared responsibility, with Alberta being by far the principal payer in this arrangement.

Saskatchewan was the only area where they had Principal Trust branches and investors who received nothing or received only the Alberta component. I'm not quite sure. Anyway, Saskatchewan has now agreed to fund into the pool so that their investors can have access. When you do that, it opens it up for everybody.

I actually struggled with this, because there was a deadline. Twice now there was a deadline for people to file for compensation. The question was: should we lift that deadline again and extend the time for people to file so they can access Saskatchewan money, further Alberta money and further British Columbia money? We chose to do so, in fairness to our people.

The extension depends on how many people take that up. The cost to the government of British Columbia for the Saskatchewan extension is a maximum of about $1.5 million, but it could more likely cost us somewhere in the neighbourhood of $500,000. In a tough fiscal year you're reluctant to do that, in a sense, because it costs money, and there are other uses of money in this day and age.

Just so we know, government compensation accounts for 22 and 25 percent of their recovery: 15 to 18 cents from Alberta, 6.2 cents from British Columbia, 0.6 cents from Nova Scotia and now a further sum, which I don't have here, from Saskatchewan. This enables more people from the various provinces to come in and take

[ Page 2373 ]

advantage of that offer. It's a fairly modest expenditure, but several hundred people who simply didn't get in, weren't informed or didn't take advantage of the offer will now be able to. That announcement was made fairly recently. That means that all of the provinces with investors in Principal Trust have now come to the table and are jointly compensating people who lost their funds in that venture.

F. Gingell: I started with your May 15 news release. That release talks about British Columbia's original offer of 15 percent. When I added your numbers up, they seemed to come up to 21 or 22 cents on the dollar. I wonder if you could give us an idea of the amount of the recovery for the investors of British Columbia now, how much in total that has cost the province and, thirdly, if the amount of $500,000 to $1.5 million is the total cost in our 1992-93 anticipated expenditures.

Hon. G. Clark: Actually, nothing is in the estimates for '92-93. That $500,000 or $1 million will increase our deficit by that amount or we'll have to cut during the year to accommodate it or it will come out of contingencies. Just so you know, the people who accepted government compensation have now recovered 79 percent of their losses.

The government of British Columbia is suing Donald Cormie -- who owned a rather nice home in the Saanich Peninsula -- under the Trade Practice Act. Mr.Cormie has an application before the court to have that dismissed. It's currently before the courts, so we can't talk about it. But essentially the government of British Columbia decided to compensate holders of First Investors Corp. and Associated Investors -- subsidiaries of Principal Trust -- and is now taking it upon itself to try to recover from Mr. Cormie.

I'm not quite sure of the breakdown between how much we're paying and the assets, but I think it's what I said. The difference is in the assets of the corporation. It wasn't completely insolvent; it still had assets.

So 79 percent of their losses, which is relatively.... One might always argue that it should be more, because I think governments clearly played a role in that failure. Nevertheless the governments have come to the table. The offer British Columbia made was pursuant to a very thorough ombudsman's investigation, and we have now extended that offer to late filers as a result of Saskatchewan coming in and providing some funds.

F. Gingell: I appreciate that any costs incurred in 1992-93 will be charged to the contingency fund in all probability. I appreciate that we can't discuss the Cormie lawsuit, but we wish you well on that point. I am wondering if you could tell us what the cost in total has been to the taxpayers in all the years.

Hon. G. Clark: I'm sorry; I used to know that, actually, but I don't. So I will provide that for you. I have forgotten. It was certainly in the millions, but I can't recall precisely.

F. Gingell: The Peat Marwick report also recommended that the use of the contingency vote should be evaluated and carefully thought about. I can tell that you did; you increased it from about $55 million to $105 million for 1992-93. Could you please advise us why the amount of the contingency allowance was increased this much?

Hon. G. Clark: There are a couple of explanations. First of all, I think there are some pay equity considerations. Secondly, there is funding for the normal contingencies, which are smaller than that, I agree. Thirdly, Peat Marwick also recommended significantly enhanced statutory expenditure appropriations.

For example, we lose money every year in court -- we get sued or we lose money -- and in the AG's ministry there's very little budgeted money for that. Because it's a statutory obligation, you don't have to budget for it. In other words, we lose a court case and we have to pay $20 million. You don't have to come to the Legislature to get that approved. The Crown Proceeding Act authorizes money to be spent -- paid out -- without appropriation in the House. Peat Marwick in one of their reports said: "You know you're going to have to pay some money, so you should budget that."

What I did in some respects is put a little more money in contingency in order to be more realistic in terms of reflecting how much the government is likely going to spend in the course of the day. I could have cut the deficit by $50 million by cutting contingency by $50 million. But realistically, because of these other lawsuits and pressures that we're likely to face -- and we did put some money in there for pay equity considerations rather than salt it through the ministry, which we could have done -- it's slightly larger than it is normally.

[4:45]

F. Gingell: Moving on to the pay equity subject and government personnel services, I was wondering if you could give us a breakdown of the number of government employees by male employees and female employees as of November 5 or some appropriate time around there when you took over, and what you anticipate that breakdown will be at the end of the 1992-93 fiscal period.

Hon. G. Clark: I'm not quite sure. First of all, Ron McEachern is the director of negotiated services in the government personnel services division. Are you asking for the total number of government employees?

F. Gingell: Yes.

Hon. G. Clark: The breakdown between men and women is about 53 percent women, 47 percent men. We do have all that information, which I could certainly provide for you, in terms of the wage gap, but I'm not sure if we have all the detailed information which you might require today. But we'll certainly try. I'm not sure what the other question was.

[ Page 2374 ]

F. Gingell: Recognizing the government's desire to engineer some of these relationships and ratios.... I do believe that the population actually has more men of working age than women; it's relatively close. I was wondering if you have any plan on what the percentage relationship will be at the end of this current year. Where are we going?

Hon. G. Clark: Just because 53 percent of the workforce are women and that overrepresents women relative to the public is obviously not indicative of very much. It's probably indicative of the fact that we have a lot of low-paying jobs in the public sector that only women are prepared to perform or because of systemic discrimination against women. What we really need and the challenge that government faces is not the absolute percentage of women versus men or the fact that 53 percent of the workforce are women, but that virtually zero percent of the workforce at the senior levels are women.

We have very few women in management positions in government, certainly nowhere near the percentage.... Do we know the percentage of women on management staff on average? It's roughly 18 to 20 percent women at the senior level in government. The challenge is to ensure that women are not discriminated against in the pursuit of management positions so that management positions more accurately reflect the public sector.

We are taking a number of initiatives, although they might more appropriately be addressed in the Women's Equality ministry, to try to address this serious imbalance both in terms of women and in terms of other issues -- visible minorities and the like. It's quite clear that at the deputy minister level, the assistant deputy minister level and the director level, those groups in society are underrepresented in spite of the fact that we have an overrepresentation of women in the public sector generally.

Again, there will be a number of initiatives taking place over the coming years to deal with that, I hope and expect, including affirmative action and some other ways in which we will go about doing that.

At this time that is really being driven by the Ministry of Women's Equality, although my staff -- you're quite correct -- will be the line ministry that has to implement any policy changes. To this date there have been no policy directives or changes made with respect to that initiative in terms of targets or levels or how we might achieve that. They're just beginning a process of working with the various personnel agencies -- GPSD and the like -- and engaging in discussion on that subject.

Obviously there have been significant strides on the pay equity side, but on the hiring and promotion practices of government generally, nothing concrete has taken place other than the beginning of a dialogue and a commitment on the part of government to try to deal with what we believe is systemic discrimination.

J. Tyabji: I find the minister's comments really interesting. I know that his government has expressed, both through his ministry and through many members of cabinet, a sincere and commendable commitment with regard to increasing the number of women in senior management. In the event that his ministry does end up with a policy objective of increasing the number of women in senior levels, and in the event of there not being women available to take on those positions, what is his ministry prepared to do to find qualified applicants who fit that policy initiative?

Hon. G. Clark: It's a hypothetical question that's difficult to answer, but at senior levels we do engage, and will continue to engage, in advertising the normal recruitment practices of a major employer like the government of British Columbia, and we will ensure, where qualifications are equal, abilities are equal, that women will be chosen. I think that's likely what will take place. At this point, other than a commitment on the part of government generally to promote women and to recruit women to these positions, there's no formal objective -- other than the Ministry of Women's Equality is leading towards that.

There are, I think, two issues that my staff have brought to my attention which are absolutely correct. One of the problems we do face in government is what you might call bridging positions. In other words, it may be hard to recruit a woman to be a deputy minister in a certain field, and the main reason for that is that there are no assistant deputy ministers who are women and no directors who are women. So you can't promote from within. It's just simply too high a jump.

So what we need to do is put more women in positions at the director level, which is just below an ADM, and at the assistant deputy minister level, so that if we're not filling the senior positions immediately with enough female representation, then we at least are starting to fill that second tier of management. Then, over the course of time, there will be a natural evolution to promotion.

In addition to that, we're looking at some secondment opportunities, so we may be able to second people from the private sector or from different ministries to give women more experience in other areas -- broader experience -- so that we have very qualified women.

For example, I'm very privileged to have several senior assistant deputy ministers who are women in the Ministry of Finance: Brenda Eaton in charge of all the debt and investment side of the government; Thea Vakil in a, frankly, powerful position as secretary of the Treasury Board, a superb public servant; Pat here; and we have directors Lois McNabb and Ann Kirkaldy in Treasury Board staff. We have a lot a women in the level that I am talking about. It may be that those women....

I'd be very reluctant to lose them from the Ministry of Finance, but it wouldn't surprise me that, over the course of time because we've done well in the Ministry of Finance, they may well be able to move to higher senior positions in other ministries. In fact, it may be that there are secondment opportunities for them as well, to broaden their experience through the ranks.

So there are a number of initiatives. To my knowledge, there is no actual formal position stated of what we're required to do. There's certainly a commitment on the part of all of us, and we're working on it. There's lots of discussion, and lots of direction given from me

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and other ministers in the government. But we haven't got a document that you can point to that says exactly what we're doing.

J. Tyabji: In the event that the Women's Equality portfolio does demand some kind of quotas, or whatever policy is implemented, does this minister see it a higher priority to be hiring women from outside the province or internally? Basically the question is whether it's a higher priority to have women in those positions, or is it a higher priority to give employment to people of B.C.? Where do the priorities lie, and how do you judge these things? What kind of balancing act would you put in place?

Hon. G. Clark: I think that would be more appropriately addressed to the Minister of Women's Equality. I'm not trying to duck it, but it is kind of a hypothetical question. Just speaking personally, I reject the notion that we can't find qualified women in British Columbia, both internally as I suggested a minute ago and within British Columbia in the private sector, to take positions of influence and authority in the government of British Columbia.

I really don't think it's a choice between an unqualified woman and a qualified man, or a choice between a woman from outside British Columbia and a woman from inside British Columbia. I think, provided we're looking at bridging positions and secondment opportunities to broaden people's education and experience, that it's very doable to simply not have to have that choice. We can work very solidly and progressively over time to ensure that women are more represented in senior ranks.

J. Tyabji: I don't want the minister to think for a minute that I don't think there are women qualified to do the job. Obviously there are, but you may find yourself in the position of trying to fill a position when there is no woman who wants it. You do get into a lot of problems when you're starting to deal with quotas.

The minister put several qualifications on the idea of having gender parity in terms of senior positions: provided there's secondment and bridging. To what extent is this minister responsible for placement of staff within his portfolio, and to what extent is he going to be accountable to the Women's Equality policy that is coming in? You may say it's hypothetical or future policy, but we are dealing with a new Ministry of Women's Equality, where we're not sure how that kind of policy is going to be af