1998/99 Legislative Session: 3rd Session, 36th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 21, 1999

Afternoon

Volume 16, Number 7

[ Page 13805 ]

The House met at 2:07 p.m.

Prayers.

L. Reid: One of our staff members in the Liberal caucus, Dave Beaton, has a family member in the gallery today. I would ask the House to please join me in welcoming Mr. Jim Beaton, who is visiting this Legislature from Ontario.

G. Campbell: I'm pleased today to be able to introduce to the Legislature Marg Lundy and Alex Dawson. They are in-laws of my brother Robert, who lives in Perth, Western Australia. They're here to find out about not just the glories of Victoria and Butchart Gardens but also the thrilling and invigorating debate that we have here in the Legislature. I hope we'll all make them welcome.

W. Hartley: Joining us in the gallery today are Ken and Sheri Levine, who I understand work in the Florida state legislature. On behalf of the Clerks, let's welcome them to the session here today.

G. Bowbrick: Joining us in the gallery today are approximately 20 visitors from Vancouver Formosa Academy, in the Premier's riding. Ms. McLardy, a teacher, is here with about five adults and about 15 grades 8-to-10 students. I ask all members to join me in welcoming them.

[1410]

C. Clark: The SFU B.C. Young Liberals are making their annual pilgrimage to Victoria for question period, and I'd like to introduce them. They are Rick Sousa, Chad Peterson, John Panago, Christopher Steinbach, Brian Shek To, Afiya Khan, Albert Chan, Andrew Haskall and Dale Shuen. I hope everyone will make them welcome.

L. Stephens: It's a pleasure for me to welcome my son Mark Stephens, who's in the gallery today with his friend Aaron Bartlett. Mark is president of the Kwantlen Student Association, and Aaron is vice-president external. Kwantlen is the largest university college in Canada, with 23,000 students on four campuses: Langley, Surrey, Newton and Richmond. They're here today to meet with the Minister of Advanced Education and the opposition. Would the House please make them welcome.

F. Randall: In the precinct today are 27 grade 7 students. They're from John Knox Christian School in Burnaby-Edmonds. They're accompanied by their teacher Laura Gaeger and six other adults. They asked for an emphasis on grade 7 social studies for their tour. Would the House please make them welcome.

B. Goodacre: In the gallery today, and visiting Victoria from Houston, are Mayor Tom Euverman, Deputy Mayor Sharon Smith, Councillor Bonny Hawley -- who's also past president of the NCMA and a board member of the UBCM -- and Bill Beamish, the town administrator. I would ask the House to please make them welcome.

Introduction of Bills

HEALTH STATUTES AMENDMENT ACT, 1999

Hon. P. Priddy presented a message from His Honour the Lieutenant-Governor: a bill intituled Health Statutes Amendment Act, 1999.

Hon. P. Priddy: I move that Bill 76 be introduced and read a first time now.

Motion approved.

Hon. P. Priddy: This legislation makes amendments to a number of health statutes, as well as some consequential amendments to other statutes. It's an example of government's commitment to reducing red tape for British Columbians, particularly for consumers of the health care system. In support of government's initiatives to streamline, this bill repeals several very obsolete parts of the health legislation, including the Hospital (Auxiliary) Act and some provisions of the Community Care Facility Act, Health Act and Hospital Act.

This bill also amends

section 11 of the Health Act, which authorizes medical health officers to order a person who has a reportable communicable disease to comply with certain conditions, up to and including quarantine. The medical health officer may charge a person who is not complying with such an order.

Section 11 is amended to also authorize assistant or deputy medical health officers to lay a charge of non-compliance.

Hon. Speaker, last year this House passed the Mental Health Amendment Act, 1998, which made a number of important changes to our mental health legislation in support of the government's mental health plan. This bill makes several minor corrections to last year's act, to the

Interpretation Act and to the Patients Property Act which will allow us to proceed with bringing all of last year's Mental Health Act amendments into force at the earliest opportunity.

Finally, the bill provides for the repeal of the Naturopaths Act and the Psychologists Act. This is being done at the request of the governing bodies of those professions. In the future both professions will be regulated under the Health Professions Act. There are several consequential amendments to other statutes accompanying the repeal of these two acts, as well as some necessary transitional provisions.

I'm pleased to be able to table this legislation today, and I move that this bill be placed on the orders of the day for second reading at the next sitting of the House following today.

Bill 76 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.

FORESTS STATUTES AMENDMENT ACT, 1999

Hon. D. Zirnhelt presented a message from His Honour the Lieutenant-Governor: a bill intituled Forests Statutes Amendment Act, 1999.

[1415]

Hon. D. Zirnhelt: I move that Bill 82 be introduced and read a first time now.

[ Page 13806 ]

Motion approved.

Hon. D. Zirnhelt: Bill 82 contains amendments to the Forest Act and the Forest Practices Code of British Columbia Act.

The amendments to the Forest Act improve tenure administration for government and industry, provide for more effective and fair compliance and enforcement, strengthen log-marking requirements and provide implementation powers for the Nisga'a final agreement.

The amendments to the Forest Practices Code of British Columbia Act clarify operational responsibilities related to forest roads and improve provisions relating to compliance and enforcement and reviews and appeals. The amendments will also allow pilot projects to be established that test ways to move towards a more performance-based Forest Practices Code, as was promised by the Premier at the Cariboo economic summit in May.

The changes in this bill build on the forest action plan and government's other initiatives for the forest sector. I move that Bill 82 be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 82 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

PREMIER'S CREDIBILITY IN HYDRO-RAIWIND LAWSUIT

G. Farrell-Collins: Last week we heard from the Premier's own mouth that he directed B.C. Hydro to pursue their case against Mr. Sheehan, which ultimately cost British Columbians some $500,000. Now he tells us that he is directing Mr. Smith at Hydro to pursue an appeal of that case. Why would the minister responsible for Hydro allow this disgraced Premier to direct a court case in which he has a clear political interest? Can the minister tell us who is going to make the decision on whether or not there is an appeal of the Premier's credibility? Is it going to be the minister? Is it going to be the lawyers at B.C.

Hydro? Or is it going to be a Premier who has a clear personal, political interest in that appeal?

Hon. D. Miller: I would say that the individual who has the clearest political agenda is the member who just spoke.

The Speaker: First supplementary, the hon. member for Vancouver-Little Mountain.

G. Farrell-Collins: A ringing endorsement of the Premier's credibility, yet again, from the Deputy Premier.

The Deputy Premier stood at the Premier's side at the press conference on Friday when the Premier said that he had personally directed the chair of B.C. Hydro to pursue this case and that he had been speaking with Mr. Smith to tell him and direct him to pursue an appeal. How does the Deputy Premier feel, standing there, when he knows the Premier is fiddling with B.C. Hydro's legal matters because he has a clear personal, political interest? When will the Deputy Premier stand up and tell that man he has no credibility?

Hon. D. Miller: It's amazing how two people can be at the same press conference and come away with different opinions. For the edification of those members who weren't there, let me try to deal with two topics relative to this matter that were raised at the press conference. The first was that the Premier indicated that B.C. Hydro officials had said to him they were prepared to settle this matter out of court. The Premier indicated that he would rather they didn't do that, because he felt very strongly about his position. He rejected what some might say, in hindsight, was sort of the easy way out, because of the strength of his feeling.

The second point was whether or not this issue ought to be appealed. B.C. Hydro had already indicated in a press release prior to the Premier's remarks that they were examining that question. The Premier simply offered his opinion that in view of the fact that the courts had found . . .

Interjections.

The Speaker: Order, members. Minister, finish up your comments, please.

Hon. D. Miller: . . . that Mr. Sheehan had in fact been derelict in his duty, he thought it should be appealed; that he rejected the idea that someone in that senior position, making those kinds of wages, had been found by a court to have committed errors in judgment . . . . We should appeal that, because the principle of paying people for that, particularly in those senior positions, was unacceptable.

[1420]

The Speaker: Second supplementary, the hon. member for Vancouver-Little Mountain.

G. Farrell-Collins: What's completely unacceptable is that the people of British Columbia have been paying the Premier for all these years -- with his performance and his lack of judgment. The easy way out for the Premier, rather than directing the legal affairs of B.C. Hydro, would have been to tell the truth in the first place.

We know that this Premier has no credibility. The Supreme Court of British Columbia said they didn't believe a word he said. They chose Mr. Sheehan's statement over the Premier's. Why do the people of British Columbia have to pay several thousand dollars more -- probably tens of thousands of dollars -- to appeal something they already know -- that you can't believe a thing the Premier tells you?

Hon. D. Miller: As I said last week, what is truly remarkable is that the member opposite engaged in perhaps one of the more vicious smear campaigns that I can recall in this province -- one of the most vicious, underhanded, ill-founded smear campaigns, in the gutter, that we have ever witnessed in this province. I would say it's safe to say that when you engage in that kind of activity, some of it sticks. What we know from the judgment of the courts is that every spurious, unfounded allegation made by that member there was determined by the courts to have absolutely no foundation. That member there can't bring himself -- it's not within him -- to stand up and offer an apology to . . .

The Speaker: Thank you, minister.

Hon. D. Miller: . . . all of the people he smeared. And we are supposed to take moral lessons from that member over there. I think not.

[ Page 13807 ]

PREMIER'S CREDIBILITY IN NORTH BURNABY CASINO APPLICATION

C. Clark: You know, every time the Premier gets caught in a scandal, he concocts some excuse. When he got caught in the casino scandal in North Burnaby, he said that he didn't even have a passing acquaintance with Mr. Pilarinos. Then it turned out that they were friends. Then it turned out that they vacationed together. Then it turned out that they built a deck -- no, two decks. "Oh, and, by the way, here's a hunting knife."

Given that the Supreme Court has said that the Premier cannot be believed, is this gambling minister still prepared to stand up and defend the Premier's claim that he had no involvement in the granting of that licence to his friend?

Interjections.

The Speaker: Order, members. Come to order.

Hon. D. Miller: Here we have the modus operandi . . .

Interjections.

The Speaker: Order!

Hon. D. Miller: . . . of the opposition party in British Columbia: engage in smear campaigns; engage in innuendo with no proof; smear, smear, smear; roll around in the gutter; call everything a scandal and hope that it works politically. Then, when they're proven by the courts to have been wrong . . .

An Hon. Member: Roll some more.

Hon. D. Miller: . . . smear some more. This is the agenda that these people here would bring to the province of British Columbia: nothing but throwing mud. As I've said before, he who throws mud loses ground.

We do not need to defend against those kinds of allegations, that kind of mudslinging. We don't have to defend a Premier who's frozen tuition fees for four years in a row in British Columbia. We don't have to defend a Premier, who has been leading a government that signed the first modern land claims treaty, against the narrow, bigoted view of the members opposite. I and British Columbians wish, hon. Speaker, that they would stop smearing, would stop the innuendo, would get out of the gutter and start to come clean on what it is they're proposing to do in this province.

The Speaker: First supplementary, member for Port Moody-Burnaby Mountain.

[1425]

C. Clark: Well, the Deputy Premier won't stand up and defend the Premier; he won't stand up and defend him. The Premier said there was a lot of love in the room at the convention. I've got to ask: where has your love gone?

The point is that every time the Premier puts his personal credibility on the line, he loses. He told British Columbians to believe him that the budget was balanced, and the auditor general said it wasn't true. He told British Columbians that he didn't know what was going on at B.C. Hydro, and a Supreme Court judge has said he doesn't believe the Premier.

The Premier has stood up and said that he had nothing to do with the gaming scandal in North Burnaby. My question is this: after what we know the Supreme Court has said about the Premier's credibility, will the gambling minister stand up and defend the Premier and continue to stand by those claims? Does he still believe that the Premier wasn't involved?

Interjections.

The Speaker: Order, members. Come to order.

Hon. D. Miller: What we won't do is engage in the guttersnipe tactics of the opposition.

Interjections.

The Speaker: Order, members.

PREMIER'S CREDIBILITY IN HYDRO-RAIWIND LAWSUIT

M. de Jong: Well, I was at the NDP convention on the weekend. I'm hearing more noise from the NDP in the House than I heard at the convention.

I heard the Premier rail against the evil right-wing corporate agenda being driven by the opposition in cahoots with the media, Madam Speaker. What I didn't hear from the Premier is any explanation, let alone an apology, for the fact that nothing he had to say about the Hydrogate scandal was believed by the Supreme Court of British Columbia.

My question for the Premier is: how does he expect, in the face of his ongoing silence . . . ? Will the Premier stand up in the House today and explain to British Columbians why they should believe anything he says, or is his continued silence an admission that he's finally run out of excuses?

Some Hon. Members: Where is he?

Interjections.

The Speaker: Members . . . . Members are very aware of the rule about presence and absence in the House.

Hon. D. Miller: The member for Matsqui has just confirmed everything I've said. He referred to the Hydrogate scandal. The Hydrogate scandal defined by the Liberals was that shares were made available to friends and insiders. That was one. Number two is that it was a tax avoidance scheme. That was the Hydrogate scandal. That was the sum and substance of the Hydrogate scandal, and the courts have just ruled that there was no foundation to any of those allegations. Notwithstanding that, the member still says: "Hydrogate scandal." They are muckrakers of the first order.

It's a tactic that might seem convenient in the short term, but I can give them assurance based on some years in politics that it doesn't carry you anywhere in the long term.

The Speaker: First supplementary, the member for Matsqui.

[ Page 13808 ]

M. de Jong: So there was no scandal, but the two most senior officials at B.C. Hydro were fired, and $500,000 was paid to one of them -- no scandal there, according to the Deputy Premier.

I want to go back to the gambling minister, because, you know . . .

Interjections.

The Speaker: Order, members.

M. de Jong: . . . I wasn't fair to the Premier a moment ago. He did actually offer an excuse on Thursday. If you can believe this, the Premier, in attempting to explain why the Supreme Court of British Columbia didn't believe him, said: "Bad legal work on the part of our lawyers -- sloppy legal work." My question to the minister responsible for hiring those lawyers -- the minister responsible for the Crown corporation that hired those lawyers -- is: does he agree with the Premier? Was it sloppy legal work? Was it bad legal work? And just how much money did British Columbia taxpayers pay for what the Premier has characterized as sloppy legal work?

[1430]

Hon. D. Miller: Again, the question is repetitive, but let me remind the House of what the Premier said. He simply expressed a view, one that I think all British Columbians would support, that when a person is in a senior position -- as the head, in this case, of a Crown corporation, B.C. Hydro -- and when the courts in their ruling make the following statement: "In my view, as CEO Mr. Sheehan was obliged to bring to the attention of the board any matters that could materially affect Hydro . . . . Mr. Sheehan ought to have advised the Hydro board.

In my view, his failure to do so constituted an error in judgment." When the courts make that kind of statement about a person at that level of senior position . . . . The Premier was simply expressing the view that I think all British Columbians would accept. Why under those circumstances should that individual be entitled to a pay-out greater than half a million dollars? Quite frankly, I thought it would be self-evident, even to that scandal-mongering, muckraking, in-the-gutter opposition.

Tabling Documents

Hon. D. Streifel: On Thursday after my ministerial statement, the member for Richmond-Steveston seemed to be confused as to what work the British Columbia government had already done on behalf of coastal communities. Hon. Speaker, I table some documents.

Interjections.

The Speaker: Order, members.

Ministerial Statement

NATIONAL ABORIGINAL DAY

Hon. G. Wilson: I rise today to make a ministerial statement. It gives me great pleasure today to speak to you on the occasion of National Aboriginal Day. National Aboriginal Day gives British Columbians a chance to learn more about the values and interests of aboriginal peoples. Celebrated each year on June 21, the summer solstice, it is a day of cultural importance to aboriginal people in Canada. Celebrating the rich diversity of aboriginal culture is a way for all British Columbians to recognize the important contributions of aboriginal people to our society and to strengthen our commitment to work together to achieve self-determining, healthy aboriginal communities in British Columbia.

It has been an exciting year for our ministry in British Columbia, since June 21. Among our achievements, the Nisga'a treaty was completed, and the Sechelt agreement-in-principle was signed. Fifteen more tables are now fully mandated, which will result in a number of agreements-in-principle before this time next year. The province is pleased with the progress that has been achieved under the six-year-old B.C. Treaty Commission process. This is a process for resolving land claims, achieving economic and land use certainty and creating jobs and new economic opportunities.

Fifty-one first nations groups are currently active in the B.C. Treaty Commission process. One of these groups, the Sechelt, have reached an agreement-in-principle, while 37 tables are now in the agreement-in-principle stage, the substantive stage of negotiations. Several of these groups are very close to reaching agreement.

An agreement for improving and fast-tracking treaty negotiation remains a high priority for the provincial government. Outside the treaty process, we will continue to support consultation processes related to interim measures, dispute resolution and other negotiations. The Delgamuukw decision heightens the importance of the treaty negotiations. We are now applying a consistent consultation regime in accordance with Delgamuukw, and we are currently reviewing the treaty process with Canada and first nations to revitalize negotiations and achieve settlements.

We recognize that many aboriginal people do not live on reserve; therefore the province is actively working with urban aboriginal peoples, including youth groups, on child care, education and job and training issues to address their specific needs.

Treaties will take time. We need to create opportunities today. Government encourages partnerships between business and first nations. This increases participation of aboriginal communities in the provincial economy, provides opportunity for aboriginal youth by creating a sense of purpose and hope for the future and stimulates local and regional economies. Already there are many examples of this across Canada and in British Columbia, including financial services, construction contracting, transportation, forestry, manufacturing and health care.

High-profile partnerships in B.C. include the Khowutzun Development Corp., the development arm of the Cowichan tribes, which received the recognition award in November 1998 from the Council for the Advancement of Native Development Officers. The Campbell River Indian band received the economic-development-of-the-year award in February 1999 from CANDO for its Discovery Harbour shopping centre. It is wonderful to see this recognition of hard work and dedication.

[1435]

The province supports aboriginal businesses in a number of ways. The First Citizens Fund, a self-sustaining fund administered by my ministry, promotes the establishment and expansion of aboriginal businesses through its business loan

[ Page 13809 ]

program. In 1998-'99 this program awarded 127 loans, totalling $4.3 million. Last fall the Ministry of Energy and Mines signed an agreement with five Treaty 8 first nations to create greater certainty in the oil and gas industry. It is important for us to share in these achievements and mark the progress that we have made so far. Make no mistake, we have a lot of work ahead of us. It is important on this day, National Aboriginal Day, that we pause to reflect on the efforts we have made so far and to renew our commitment to continue making progress as we move together into the twenty-first century.

The Speaker: I recognize in response the hon. member for Matsqui.

M. de Jong: I am mindful of the ruling you made in the past, though I confess I am somewhat at a loss to understand its application over the past couple of ministerial statements. But let me say this.

Interjections.

The Speaker: Members, come to order.

M. de Jong: I think we should recognize this day, National Aboriginal Day, which falls on the longest day of the year -- and I'm sure these days seem long if you're sitting on the government side of the benches . . . .

Interjections.

The Speaker: Members . . . .

M. de Jong: We should recognize this as a day where we focus on the cultural and historical qualities of aboriginal peoples in Canada. The minister referred to that at the beginning of his statement. We should -- as we have been during the course of the debate that's taken place in this House over the last year -- be mindful of their struggle and of the discriminatory elements of the laws that have been passed in Ottawa and British Columbia that they have had to overcome over the past number of years and generations.

It is a day when we should join with aboriginals and attempt to articulate and express to them how we have come to better understand some of those struggles -- not all of them; we do have a long way to go.

However, as we look to the future . . . . The minister has gone on at some length, pointing to things that he and his government would define as accomplishments. We should also be mindful of some of the challenges and recognize them and speak about them. We have first nations groups who are engaged in a negotiation process -- which the minister reminded members of this House of during the estimates debate -- which has seen them incur more in terms of the cost of negotiations than they are likely to ever reap as the result of an ultimate settlement. That can't be a satisfactory state of affairs for anyone.

On a day when we properly celebrate the accomplishments and achievements of first nations -- the progress that they and we have made as a society, as British Columbians and as Canadians -- let us not lose sight of some of the tremendous obstacles that lay in the paths of all of us in achieving the settlements that I think we have at least established in this chamber that all of us look to. If we disagree on what those final settlements should look like, surely we do agree on the fact that we have to continue to work towards achieving them. This is a day when we should recognize that, above and beyond everything else.

[1440]

Orders of the Day

Hon. D. Lovick: I call Committee of Supply. In this chamber, we will be continuing to debate the estimates of the Ministry of Forests; in the other chamber, we will be discussing the estimates of the Ministry of Employment and Investment.

The House in Committee of Supply B; W. Hartley in the chair.

ESTIMATES: MINISTRY OF FORESTS

(continued)

On vote 34: ministry operations, $282,402,000 (continued).

G. Abbott: Hon. Chair, we are recommencing the first

section of the Forests estimates, which we began on Thursday of last week. I don't know whether it's good timing or bad timing, but we have an interesting development in the B.C. forest industry at a time when we're discussing the state of the industry. That, of course, is the story around the purchase of MacMillan Bloedel by Weyerhaeuser.

Could the minister advise what process will be followed from this point on, with respect to that purchase? Is there a specific process, from the minister's perspective, which will have to be followed in order to allow that sale? What are the regulatory issues involved from the ministry's perspective?

Hon. D. Zirnhelt: It'll be the same as any other change of control.

Section 54 of the Forest Act will be followed -- where the company has to apply for the transfer of the rights under the forest legislation.

[1445]

G. Abbott: For those of us who don't immediately know the implications of

section 54, does that involve public hearings? What's the regulatory process involved there?

Hon. D. Zirnhelt: Most of the process is governed by policy, and there are some practices that have become customary. An assessment is made as to the nature of the public interest. In this case, I have said already that there would be some public hearings to assess community response to the proposed transfer. The policy basically is that once we have the application in hand, we then proceed to analyze the information provided to us and plan a series of public meetings in those communities that are primarily affected by the transfer.

G. Abbott: Is the assessment of the public interest something that is formed by the submissions which are made at the public hearings, or is professional assistance engaged to complement the submissions that are made at public hearings?

Hon. D. Zirnhelt: It's customary that we provide a resource -- either from the ministry or from outside the

[ Page 13810 ]

ministry -- to assist the chair of the hearings -- or, in the case of a panel, to assist the panel. We don't fund interveners, and we don't assist the company in preparing its positions. Part of the practice would be to hold meetings with the key stakeholders -- and there obviously have to be consultations of some nature with first nations there. That's the gist of how we implement the policy.

G. Abbott: I appreciate the minister's detail on this. The appointment of a panel will presumably follow formal notification from the parties that they intend to proceed with this. Is the size and structure of that panel something which is flexible, or is it certain under the terms of

section 54?

Hon. D. Zirnhelt: It is not governed by

section 54; it's governed by policy. Basically, it's the determination by the minister of what is required to assist him in determining the degree of public input. What's been customary is to have MLAs of the affected region involved on the panel in some way, as representatives of the communities that are affected.

G. Abbott: Just so I understand the panel issue a little bit more . . . . The companies will notify the minister; the minister, in turn, will attempt to appoint a panel, which is at least in

part comprised of MLAs from the affected areas. Is that correct? I guess the reason why it raises questions in my mind is that, given the size of the two companies involved here, a pretty big patch of British Columbia is affected by this sale -- or could potentially be affected by this sale. How would that, then, be managed?

Hon. D. Zirnhelt: In this case, because of the licences of M&B that are affected, we don't expect there to be any effect upcountry in Weyerhaeuser territory. Those licences aren't being transferred. So it'll be the Island, parts of the mid-coast and the Queen Charlottes, primarily, and some of the lower mainland.

[1450]

G. Abbott: When was the last time a panel of this sort was struck?

Hon. D. Zirnhelt: It was in the case of the sale of Crestbrook Forest Industries to Tembec.

G. Abbott: In that case, there was a public hearing in Cranbrook. The panel included what, in that case -- one MLA?

Hon. D. Zirnhelt: As we recall, there were four communities primarily affected. The committee was chaired, as is often the custom, by the Parliamentary Secretary to the Minister of Forests. That was one MLA; two other MLAs sat on the panel.

G. Abbott: I'm not familiar with the process in terms of the involvement of opposition MLAs. Is it the expectation of the ministry that the panel is comprised exclusively of government MLAs? Or is it typical in these cases to involve opposition MLAs whose constituencies may be affected by it?

Hon. D. Zirnhelt: I haven't personally looked at the communities involved. I take advice from the officials and consider the advice, and I look at which MLAs might be affected and take that into consideration when I appoint a panel. So it's possible to include opposition MLAs in the hearings.

G. Abbott: I guess the timing of the public hearings is going to be dictated, at least to some extent, by the timing of the official notification from the parties in this, so I won't pursue that further. Presumably the public hearings and the assessment of the public interest follow fairly quickly upon formal notification. Or is a time frame of a couple of months what one might expect in these situations?

Hon. D. Zirnhelt: Well, the consideration every time that I've been asked to do this -- and I think it's been four -- is the balance between giving the public enough time to become informed about the nature of the transaction and the implications of it, and the expediency required to successfully complete the business transfer. Typically, it's two to three months for the public involvement process. I understand that it's two to four months for the closure of the deal between the companies -- which of course would be contingent upon approval of the transfer.

Sometimes these dates come together about the right time. But we are cognizant of the balance between giving people time to be heard and an expedient decision.

G. Abbott: I'm not aware of any reason why today's announcement between the parties would affect the other process which is underway, which is public hearings with respect to the resolution of compensation issues between the Crown and MacMillan Bloedel. Is the minister aware of any reason why that

schedule would be changed or disrupted?

Hon. D. Zirnhelt: No, I'm not aware of any reason why there should be a change.

G. Abbott: I want the minister to outline to me what the consequences are to the holdings of the party. I guess this would be MacMillan Bloedel in particular. For example, will the 5 percent takeback rule come into play with respect to this sale?

Hon. D. Zirnhelt: Yes. I have already said publicly that this will probably be an issue discussed at the hearing, although the 5 percent issue is separate from the transfer of licences. The takeback of 5 percent is automatic. That's what the Forest Act says. We have a provision in the act that says that they may apply to have it reinstated, should they provide an acceptable job creation plan.

[1455]

G. Abbott: I think we had a thorough discussion of the 5 percent takeback provisions last day, so I won't pursue them any further. Are there any consequences in terms of tenure or holdings or anything of that nature beyond the 5 percent provision that would come into play as a result of the purchase of MacMillan Bloedel?

Hon. D. Zirnhelt: It's really too early to tell, because I don't have an application in front of me. I'm only going on the intent that was stated, which was to apply for the transfer. In the briefings from the company we did not get into any detail

[ Page 13811 ]

on that. We customarily await their formal application and look at the contents of the application. It is possible that they won't apply for some tenures. I don't know. We'll wait and see.

G. Abbott: I thank the minister for his responses to those questions. I think that covers off the questions I have -- at least at this point in time -- on today's announcement.

I want to return briefly -- or perhaps not so briefly -- to the issue of a public review of forest policy, which we were engaged in last day. I think that where we left it was with my view that the review may be very timely. It may be an excellent opportunity, because there is some predisposition on the part of the public, the industry, the IWA and all of the stakeholders in the process to look at new ideas at this point in time. It could be very valuable for equipping the forest industry for the twenty-first century.

I think I left off with the suggestion that, in my view, it is absolutely critical that the panel, commission or group -- whatever it is -- be professional, non-partisan, independent and unbiased, so that the public will enjoy a lot of confidence in the group that leads the process.

That begs the next question: who is going to drive the process? Will this process, if and when it arrives . . . . We know that it's going be in the short fullness of time or something like that -- it's not immediate. But certainly, if we're looking at 2001 and the renegotiation of the softwood lumber agreement, it's not going to be too far in the future either. The question is: who's going to drive the process? Who's going to coordinate the process? Is this a process which is going to be coordinated by the Ministry of Forests, or is it something that is going to be involving the Premier's Office as well?

Hon. D. Zirnhelt: In due course we'll have an announcement, and we will explain that in the announcement. With respect to the softwood lumber agreement, I have to say that federal-provincial relations come under the responsibility of the Minister of Intergovernmental Relations and the Premier. But as is practice, the minister from a sectoral ministry like Forests is obviously involved. So we will, on behalf of British Columbians and the government of British Columbia, take leadership as required in federal-provincial consultations with respect to the replacement of the softwood lumber agreement.

[1500]

G. Abbott: The minister didn't give me a clear answer. I guess he is effectively talking of this as a future policy issue. That's fine; I appreciate that I won't necessarily get that information.

Let me frame the next question this way. I am very concerned that this public policy review of forest policy, if it becomes one of the pets of the Premier's Office, will be doomed to fail, frankly. We don't need another process that is driven by a political agenda out of the Premier's Office. We've seen more than enough of those in the past few years. The success of them, to say the least, has been dismal, and I'm extremely concerned that if the Premier's Office is guiding, driving or coordinating this thing, it will become just another on the list of failed initiatives by this particular government.

I think it would be most unfortunate if that were to happen. I appreciate that we're partisans in a partisan environment here, but I think that we do have an opportunity to make a difference in terms of future forest policy in British Columbia, if this process is done right. If it's taken over by the Premier's Office, one can only anticipate that the process will get mired in a whole range of considerations that are extraneous to good forest policy in British Columbia.

The minister may not want to answer that. I'll certainly allow him the opportunity, but let me at least frame it by saying that it is my heartfelt opinion that we need to keep -- as much as we can, at least -- the politics out of this thing. We need to have an opportunity to look, in a non-partisan way, at critical issues in forest policy in British Columbia. So I'll invite the minister to comment on that proposition if he wishes. I appreciate that it's his prerogative to reserve all the final detail about the process to a time when he wishes to announce it.

The other point that I need to ask about is the recurrent rumours around who is going to be leading this process -- if indeed the process comes to a forum. The rumours that are recurrent are around former cabinet ministers or former MLAs being invited to take on the process. It may not even be just former NDP MLAs or former NDP cabinet ministers but people who certainly come with a good deal of political baggage and who I certainly don't think would be viewed as non-partisan. They might be viewed as professional, but they're certainly not going to be viewed as non-partisan, independent and unbiased. Can the minister assure me that the leadership in this process won't be from that direction?

Hon. D. Zirnhelt: It's my view that any process taking on a major policy review like this has to be credible. I would just remind the member that the short-term forest action plan process, which was really led by the Premier and me, with the assistance of the deputy minister, the CEO of Forest Renewal B.C. and the timber jobs advocate, was a successful process that led to some short-term policy changes that have been beneficial to the industry. So it is possible for a process led by government and agencies close to government to have credible output.

I think that in order for it to be successful, we need stakeholders and the public to offer us their comments. The public interest is behind any policy review like this. What's critical -- whatever the outcomes -- is that it reflects the view of the public. I can say no more, because it is future policy. I hear what the member's saying. I too want the process to be credible, effective, good for the people of British Columbia and good for the sector.

[1505]

G. Abbott: I thank the minister for his response. The minister is now clear on my opinion on this thing, and I won't belabour the point. The hope I have is that what we will be looking at is something other than what we saw with the 30- and 90-day processes. I don't dispute that they were useful; I think they were good processes. Some useful, if perhaps modest, changes have been produced by that process. Unless I'm misreading the character of submissions made by people like the Association of B.C. Professional Foresters, MacMillan Bloedel and others, I think they are looking for something broader than that. I guess we will be seeing, in time, what this process is.

The question of the scope of the issues to be addressed by the process is one that interests me, because this is a time when there are a lot of ideas out there. MacMillan Bloedel, for example, issued their White Paper on stumpage and tenure reform back in June 1998. It contains a lot of interesting ideas and suggestions around adjusting tenure, changing stumpage

[ Page 13812 ]

and so on. More recently, at the start of the recent public hearing process for their compensation agreement, MacMillan Bloedel indicated that they had an interest in giving up forest land in exchange for tenure reforms. Certainly they continue to push for some very broad-brush changes with respect to forest policy.

Similarly, in the discussion that occurred at the last meeting of the Association of B.C. Professional Foresters, there were some substantial discussions around important changes to tenure. I think it was an Assistant Deputy Minister of Forests who advanced her personal vision of forest tenure reform in British Columbia, rather along the lines -- in some respects, at least -- of that put forward by M&B and others: equal division of forest tenure between government, industry and first nations.

Of course, there's going to be a whole range of different ideas, permutations around what we do about tenure, what we do about market-based stumpage -- those kinds of things. To me, the question is: how does the ministry anticipate taking some of those ideas and packaging them in a form that British Columbians would want to give their meaningful comments to? Is that the objective here -- to try to capture a particular vision of tenure reform and stumpage reform by saying, "Here's one set of ideas," and asking what they think about it? Is that the kind of process we have in mind here, or is that a misreading of where we are going with respect to the process?

Hon. D. Zirnhelt: Well, it is future policy. But let me say that we intend to advance ideas to ensure that the public has some sense of where we might go in forest policy to reflect a future state that's better than the one we're in. There has to be an awful lot of work. We will invite the views of many, and on an appropriate basis those might be summarized and made available to people for comment. But the government intends to show some leadership with respect to the directions that we might go in.

[1510]

G. Abbott: I think it's important that the government provide that. It's important that some definite changes come out of this, that we won't see the public kind of punching away at very amorphous things, and that we have a clear idea of what's being debated and what is potentially on the table so that we do see the public with an opportunity to fully engage on these issues.

I'll exclude the discussions around the 30-day and 90-day plans. But the last process of a more expansive character was the Forest Resources Commission, which released its report entitled "The Future of Our Forests" back in April 1991. The report of the Forest Resources Commission contained well over 100 recommendations. I certainly don't propose to revisit those 108, but there are a few which I think might be worth talking about again because perhaps elements of them will reappear in the pending process.

For example, in the Forest Resources Commission list of recommendations there's a recommendation by the commission -- this is recommendation 22 -- that a two-year timetable be established for completion of all district land use plans. I don't think that has been achieved. Is there a sense that it would be useful to revisit the issues of land use plans? Is that something that would form a part of the ministry vision, which would be under discussion in a future process?

Hon. D. Zirnhelt: Of course, the land use planning, as the member knows, has taken some years. It's not something that can be done easily, and perhaps that's going to be the case with the recommendations for any change in policy. You can't do any of this overnight. It's the policy of government to carry on with land use planning, but it is time-consuming both on the part of the volunteers and on the part of the government staff that back up and provide information to the processes.

Before we're to have a new era of a results-based Forest Practices Code, we have to have very detailed land use objectives at least at the landscape unit planning level. I don't think the Forest Resources Commission really contemplated 2,000 landscape unit plans, because those may take some considerable resources and require the full set of provincial, then regional and now subregional planning processes to take place first. I think that recommendation was overambitious.

There just weren't enough resources to do it or the ability of people to do it at the level which was necessary to give the detailed input into a landscape level of objectives, wherein you can balance various uses on a smaller scale within the landscape.

G. Abbott: The commission also made a number of recommendations with respect to the management and financial structure of the ministry. It suggested, for example, the establishment of a new ministry of renewable natural resources -- obviously something which hasn't come to be nor perhaps should have come to be. I don't think we've had the debate around that.

[1515]

It did also, though, recommend the establishment of a forest resources corporation. This one, I guess, is worth reviewing, because among the comments which were made by the deputy minister at the Northern Forest Products Association . . . . In the now famous substitute speech made up there by the Deputy Premier, he indicated at that time that it was his view -- and I guess it was his personal view -- that a forest resources corporation or something along that line ought to be established which would finance and manage the public's commercial forest land base.

So I guess the question is whether that issue is still on the table -- a forest resources corporation. Or was that just the product of some reading that the deputy minister did on the plane or something?

Hon. D. Zirnhelt: I don't think that particular proposal has ever been on a table. The Deputy Premier did give his views -- not the deputy minister -- of one possible option for managing . . . . We may or may not be that specific with respect to the policies that are required to take us into the new millennium with forest policy. But as I said, that would be future policy -- if something like that were contemplated. I'm not sure who is recommending that we pick up from the Forest Resources Commission and just go from there. Some of it may well be applicable to today, but since that came out . . . .

Ten years later things have changed a little bit around the world and in British Columbia. So in a sense we have to start over and see what's relevant, but we're mindful of the previous commission's recommendations as, I think, are most educated observers on the scene of forest policy review.

G. Abbott: The issue of "privatization" of provincial forests has been prominent in recent weeks as well. Again, the debate was prompted by the comments of the Deputy Premier. I apologize if I said the deputy minister. It certainly wasn't the deputy minister; it was the Deputy Premier at

[ Page 13813 ]

Prince George. I doubt the deputy minister would want to be quite that provocative. He might, in the quiet solitude of his office, but I suspect not at the NFPA at least.

In any event, the issue of "privatization" has prompted a lot of discussion. And a lot of it, I guess, is around actual sale of land as opposed to reforming tenures to convert shorter-term or volume-based tenures to long-term area-based tenures, which I think is the real debate in British Columbia. I suspect, in fact, from the comments the minister has made, that that's his view as well.

Again, appreciating that we are talking future policy here, at least in respect of how the question will be cast for the pending process, does the minister see the issue around tenure primarily as one involving the conversion of shorter-term, less secure, volume-based tenures to longer-term, area-specific tenures? Is that where the debate will occur, from the minister's perspective? Or will the tenure debate take on some other form than that?

Hon. D. Zirnhelt: Well, the first debate around which we'll have to achieve some consensus is: what ends do you want to achieve? If it happens to be timber production, then the question has to be: what's the most appropriate tenure to have for the maximum timber production? If the end happens to be stability of communities, then you have to ask the question: what's the appropriate form of tenure to stabilize communities? So I think it depends on what the public policy purpose is and what the public interest is, and there's a wide variety there.

Similarly, it would be surprising if the topic of governance of community watersheds didn't come up: what's the appropriate tenure form for governing community watersheds where the purpose might be to first and foremost preserve the quality of drinking water in that area?

[1520]

I expect that the debate will go around: what are the means, and what are we trying to accomplish in our stewardship of the forest? And then the question is: what are the appropriate tenures to do that? If one of the public policy purposes is to better determine what the flexibility might be around market pricing, then you might want to have more market information or market-based sales. Again, it depends on what the end will be. So the first step will be to discuss what the tenure is as a means to an end.

G. Abbott: We've been talking about the debate around the process in the context of that looming 2001 horizon -- which, as the minister corrected me the other day, is actually the end of March as opposed to the end of April. I think I was actually thinking of the end of the tenure of this government when I was talking about the end of April. Perhaps that's the source of my confusion.

That's not to get off the point, which is: if we're looking at roughly a 22-month window until the expiration of the current softwood lumber agreement, is it the expectation that we will be able to go beyond simply discussing reform of tenure over that period? Or does the minister think it's possible to actually introduce reforms prior to that deadline?

Hon. D. Zirnhelt: There will be a negotiation with the United States, and it will be handled primarily by Canada. So any changes to the management regime in Canada will have to be rolled out in the process of those delegations. It's very tricky to have a very public process and show where we want to go and not interfere with the strategy involved in negotiation. It's very complicated.

The process of dealing with the softwood lumber agreement replacement has begun. Work is happening in the trade

section of the Ministry of Forests. There are discussions between the federal and provincial governments, and as you may know, some of the industry are down in Washington on a familiarization tour this week.

G. Abbott: The Forest Resources Commission made some useful suggestions around the inventory of renewable forest resources in British Columbia. I'll just mention a few of them and get a sense of the extent to which the minister thinks the recommendations have been achieved to date and the extent to which these continue to be important issues that might form a part of a process.

We have, for example, these recommendations:

"No. 76. British Columbia undertake a commitment to complete inventories for all renewable forest resource values using standardized compatible systems.

"No. 77. A provincial resource inventory committee be established to plan and develop a program for these inventories.

"No. 78. An updated provincial timber inventory, complying with the new standards, be completed over the next ten-year period.

"No. 82. The new inventory program must be designed and funded to provide reliable statistically sound data that can be used by local resource planning groups.

"No. 84. A system for continuous updating of the provincial timber inventory must be established."

Can the minister provide me with his sense of how much has been achieved in the forest resource inventory line, what remains to be done and what importance the ministry currently attaches to the inventory area.

[1525]

Hon. D. Zirnhelt: My sense is that we have achieved a great deal in the last ten years, particularly since Forest Renewal B.C. started. But before that, one of the first things this government did was create an automatic review of the timber supply. When that happens, timber supply area by timber supply area, we go into the data, and if the inventory data is found wanting, then sometimes special studies are done to check and check again what the state of the inventory is.

Given that we've completed one complete round of five-year timber supply reviews and we've commenced the second one, we have addressed the priority ones first and we're now moving into the second go-around for all of them. All of the timber supply reviews have been done, and in that process, substantial inventory work was done.

With respect to wildlife inventory, the whole province has been covered, at least in a general way, thanks to the funding that was available from Forest Renewal. So we have a great deal of inventory information available. Since the last time I reviewed the Forest Resources Commission, I think we've made substantial progress on land use planning and substantial progress on the inventory side, which puts us in a much better position to do the planning and the fine-tuning of the timber supply reviews as necessary.

G. Abbott: I'll quickly look at a couple of the other areas to see where we are . . . . One of the things that the Forest Resources Commission discussed in its report was education. It talked about the public school curriculum and the efforts to

[ Page 13814 ]

better acquaint students with issues around forestry through the education process. It also discussed public information -- how both the industry and government operate public information programs and how more was needed to acquaint the public with the value of and the need for a forest industry in British Columbia. Indeed, recommendation No. 100 of the report was that public information and education programs conducted by all forest user groups be expanded wherever possible.

Is this something that remains a concern of the ministry -- I presume it was at the time of the report -- and would this form any

part in the pending discussion?

Hon. D. Zirnhelt: Information is important, and the government has limited resources to do that. Having said that, I think that there's been a massive program by the Forest Alliance. The ministry has a web site posting information, and there are information booths set up whenever there's a fair or an exposition that relates to forest resources. There are programs available in the school curriculum, and there are always improvements being made. I would say that there's been a substantial increase in the amount of information available to the public.

On the international side, there are tours set up so that those people who are buying products from British Columbia can come and get information about our forest practices.

G. Abbott: I think most of my questions have been answered with respect to the pending process. I do want to discuss the 30- and 90-day proposals . . . unless my colleagues have any questions around it. But I do have a last question further to recommendation No. 108 of the Forest Resources Commission, which says: "All major areas where public participation is required in the planning and management of forest land-based activities be enshrined in legislation." Does the minister have any comment with respect to that recommendation?

Hon. D. Zirnhelt: That recommendation was substantially implemented with the public review components that were put into law in the code. Before we became government, there wasn't sufficient opportunity for the public to be involved. I would say that now, in some cases, the opportunities for the public to participate exceeds the number of people and comments available to fill the opportunities. There has been a substantial increase in the public review provisions under the Forest Act, primarily in the Forest Practices Code of British Columbia Act.

[1530]

R. Coleman: I just want to ask the minister a few questions this afternoon on, basically, timber supply and some policies relative to forestry. It's difficult, when there are so many areas of forestry combined -- we're going to be having debates over a number of days with the committee and what have you -- to always be totally on top of it. But I want to ask the minister some questions relative to . . . . It's not so much on a vision or a focus on the industry. It's just more of a question of some concerns that seem to be coming out in how forest policy is affecting industry in this province.

One of them is the declining timber supply. In one report I read, it's been described as follows: "Timber deficits are pervasive, as shown in the following schedule." I have a

schedule here that shows that B.C. harvests, from 1987 to 1997, had a decline of 39 percent on the coast and 12 percent in the interior, which is an average of a 22.2 percent decline in harvest over that period of time. There is a prediction in some reports that, given the existing policies, the available volume is going to drop to approximately 55 cubic metres by the year 2010. I'm wondering if the minister would like to just comment on how we're going to address that concern, given that there seems to actually be an increase in demand for certain forest products in the world as we see a drop in our cut. How is that going to affect the industry?

Hon. D. Zirnhelt: The amount of wood we cut is not a function of world demand. The demand in forest products is a modest increase. What's happened in British Columbia is that previous governments greatly exceeded the carrying capacity for timber production, so it had to come down. A decision made by the chief forester has instructed to bring it down if it needs to come down or increase it if it can go up. What you're seeing -- the declining cuts in some areas -- is simply a matter of the calculations made by the chief forester in terms of what's available out there. He will then make a determination based on how rapidly he can get to a sustainable cut.

R. Coleman: What definitive things are we doing to basically address this problem over the next ten years? If I read this industry correctly, we need people involved in both the bureaucracy and the planning at the company and the provincial level that can think in a box that looks at 50 years as a window as to how we're going to grow timber in this province. It's not a short-term solution, by any means.

It's something that takes some definitive planning and some thought going into how we're going to get a better quality of timber over the next period of years so that our cut that's coming in either is larger or is grown faster and has less pulp in it and more quality. Obviously that's going to require some definitive program relative to some thinning, planting, fertilizing -- growing the forest.

If you look at some of the reports by, I think, Apsey and Reed, they're quite focused on the fact that we could improve how our forests would be operated over the long term if we would make some changes now. Yet I've never read anything in any of the ministry reports that I have here that leads me to believe that we're actually moving in that direction in an aggressive manner. I'm wondering what the minister thinks.

[1535]

Hon. D. Zirnhelt: The ministry has been very aggressive in pursuing forest practices that can increase the quality of management for all resources and the production of timber. That's why we have six pilots for individual forest practices agreements, where industry does certain things, FRBC funds certain planning activities and the ministries work together and work on setting some goals and on some improvements to the practices.

There are enhanced forest management planning pilot projects. There's been a tremendous amount of work done in growth and yield studies, which indicate what's happening on the second-growth forests. All this has been worked on in concert with land use plans that seek to dedicate lands under which we can have enhanced forestry activities. So there's

[ Page 13815 ]

been a lot of work going on, but I have to say that the science isn't clear that certain practices yield more wood. There's a raging debate going on out there, particularly around the economics of how you produce more.

[P. Calendino in the chair.]

R. Coleman: I'm just reviewing a report. Would the minister agree that the cost of delivering wood to mills in British Columbia rose by 75 percent between 1992 and 1996?

Hon. D. Zirnhelt: When I know what report you're referring to, I'll tell you whether we agree with that or not.

R. Coleman: The reports are done by F.L.C. Reed, a forest policy consultant in White Rock.

Hon. D. Zirnhelt: I don't know. It doesn't really help me. Mr. Reed has put out various reports at various times. We do know that the costs have gone up. We do know that we were conducting forest practices that weren't even integrating the values of integrated resource management, and some constraints were put on as a result of the code in order to protect soil, wildlife and forest productivity. And yes, in general terms, the cost of delivering wood has gone up -- no surprise.

R. Coleman: I agree that Mr. Reed has put out the odd report over time, and if you're involved at all with forestry, you'll probably come across his and a number of other stakeholder and consultant reports. I understand the minister won't have time to read all of them.

The concern that I have more than anything, I guess, having sat on the Select Standing Committee on Forests, is the fact that there was supposed to be 50 cents of every dollar spent on silviculture -- FRBC dollars. Every time I read a report, I see something that tells me that if we would increase the spending on silviculture and on basically farming the forest so we get a better yield, it would be better. Instead, it comes in somewhere between 10 and 15 cents.

Last year, when I wanted to ask him about Forest Renewal, the minister referred me back to the select standing committee. I still stand before the House today, after three years on that committee, and I have a real concern for the minister. That is that there is no measurement of outcomes of Forest Renewal. When I look at the whole aspect of how we're going to create a vision for the forest and how we're going to create long-term sustainability for our cut and actually see our cut go up, one of the places we've spent close to $2 billion is Forest Renewal BC.

During that period of time I've continually asked the question: how many trees have you planted? On how many acres that you worked on have you actually done intensive silviculture? How many have you thinned? How many have you fertilized? Where are they? Every time that question comes up to the select standing committee and you look at the annual report, these people don't measure outcomes. They don't measure outcomes and details, and they can't honestly tell you how they're accomplishing that. That's a real concern because it's tax dollars being spent; it's stumpage that came out of an industry.

I just mention that the costs of getting product to mills in our province have gone up, and part of that was the agreement that we would deal through Forest Renewal B.C., which was created as a result of the superstumpage that we added on. Now we have a Crown corporation that frankly just does not seem to meet the priorities that were set out for it back at the beginning.

[1540]

I have a concern, and maybe the minister would have a comment on the outcomes of Forest Renewal -- whether he's satisfied that Forest Renewal has actually accomplished what it set out to do and whether its business practices are what he was hoping they would be.

Hon. D. Zirnhelt: I think that, by general agreement, we were going to talk about FRBC at the last, but let me answer in general terms. All of this that you put forward is interesting. But even Mr. Reed doesn't have all the answers, and he's been a professor for 30 years. What I'm saying is that there is literature on this, and there is wide debate on how you measure objectives. There were a number of things that needed to be done to restore watersheds, but FRBC did not hit the ground running with a blueprint.

Members of the opposition, and people you know, were arguing that the money should be spent: "We know that there's a watershed that needs fixing. Never mind spending millions of dollars doing detailed planning as to which one should come first and exactly how it should be done." A lot of it, by nature, was experimental. Watershed restoration was a new program, a new idea.

Forest Renewal, in its first years, was project-driven. It took several years -- and it's defensible and understandable that it would take a while -- to be strategic-planning driven. I would say that we have better information now, based on the growth and yield studies that we've done, but you can do a lot more research. We started Forest Renewal with an inadequate amount of research, I would argue; but it's quite an interesting debate as to how much you should spend.

People will argue, when the research doesn't yield economic results immediately, that it isn't necessary or that it isn't advisable to spend the money on that. So the idea of coming up with measurable outcomes is something Forest Renewal has taken seriously, and they're in the process of compiling those results, which are supposed to be available sometime this summer.

R. Coleman: I guess that I'll save my comments on FRBC for that

section of this. Suffice it to say that if it's four or five years after it was started that it's going to come out with these measurable results, in the summer of 1999, I wouldn't find that acceptable if I were the Minister of Forests. I'd be very disappointed, if I were in his position.

I'm just wondering . . . . When was the last analysis completed in regard to forest, range and recreation resource analyses for our forests, relative to timber supply targets?

Hon. D. Zirnhelt: If you're asking about the forest, range and recreation resource analysis, it's done every ten years. The last one was done in 1994.

R. Coleman: Does the ministry have a number relative to current management practices that they see as the long-term harvest level for the province of all TSAs and TFLs?

Hon. D. Zirnhelt: Considerable resources were spent on the last TSR review -- the timber supply review -- and based on the outcome of that, it would appear that the long-run harvest level would be in the 55-60 million range. You have to

[ Page 13816 ]

realize that you can't be much more precise than that. However, given that we're in the second set of five-year timber supply reviews, at the end of that we may have a better idea. That doesn't take into account the silviculture and growth-and-yield information that may be developed as a result of ongoing research. As that's available, the chief forester will take that into account, as he does all information, such as land use planning.

[1545]

R. Coleman: Was that estimate of 55 million to 60 million cubic metres actually achieved -- and decided upon -- or was it predicted prior to the Forest Practices Code and biodiversity guidelines? Has there been any adaptation of those numbers as a result of that, if the projection was prior to that?

Hon. D. Zirnhelt: Yes, most of the estimates don't take into account research that's currently underway. Since it's a new science, the impact of implementing biodiversity guidelines isn't known. There was no textbook on this when a lot of this was undertaken. So we have the research and studies being undertaken now. As the results are known, they're taken into account by the chief forester when he makes his determinations.

R. Coleman: Is the ministry conducting those studies, or is it FRBC that's conducting those studies?

Hon. D. Zirnhelt: Well, there is some work being done under specific innovative forest practices arrangements that we have with companies in particular regions, but the ministry is undertaking the major studies that are being done. I will say that universities do some work. Sometimes they apply to do work, and there are chairs that conduct and oversee research at the universities. The primary responsibility for the studies is with the ministry.

R. Coleman: How do the numbers for projected timber harvest measure up to the actual current harvest that's taking place?

Hon. D. Zirnhelt: The current harvest is in the neighbourhood of 56 million, and it is below what the AAC is. The AAC is around 70 million.

R. Coleman: With the AAC being at 70 million and the harvest at 56 million, is this the first year that our harvest has actually been close to our predicted levels? Was it not higher the year before? Last year was there not a harvest above what we were saying -- the 50-55 million range? Was it not higher than that?

Hon. D. Zirnhelt: Last week we were into what the harvest was last year, this year and the year coming up. I can get the staff that have that information at their fingertips if you like. But no, it would be a couple of years. My recollection is that two years ago we were below the approved AAC.

R. Coleman: Would the minister know if we are the only province in Canada that has an annual allowable cut that's substantially higher than the current harvest taking place in the field?

[1550]

Hon. D. Zirnhelt: I'm informed that other provinces calculate the AAC differently than we do, but I would submit that our state of inventory information and our AAC determination are as good as, if not better than, anywhere else in the country. But they're not meaningful comparisons; it would be apples and oranges.

R. Coleman: Could the minister tell me, then, how other jurisdictions are . . . ? Let's just take an example. How is Alberta compared to us? How do they calculate their cut that's so much different than us?

Hon. D. Zirnhelt: I'm informed by the assistant chief forester that we can get the technical information. Basically the difference is that they do a calculation as opposed to a determination. Our chief forester has certain things that he calculates, but he makes a determination based on a wide range of factors. That's the difference.

R. Coleman: Last year in estimates I asked a few questions relative to the overall goals of the ministry. The minister said that there were some things ongoing and that we would see some outcomes this year in estimates relative to the forest industry and the goals for the ministry. The questions I asked were basically: what were your goals for the forest-bred industries in the province, and, if the minister had goals, how were they developed and when would they be completed? I'm wondering how you've progressed down that road since a year ago, when I asked you that question.

Hon. D. Zirnhelt: Well, last year we embraced those goals of the jobs and timber accord that were ministry responsibilities, and we proceeded to implement those -- like more wood for the value-added industry and making some wood available under the . . . . We can get into this under the

section on the jobs and timber accord. We've made substantial progress in making the undercut available, and we have measured that. Last year we were also working on the forest action plan, and I think the results speak for themselves. We had an objective to set two years of wood ahead, and I think we achieved 1.9, plus or minus. We responded to all those industry interests and licensees that wanted two years of wood ahead. Those are some of the highlights of the goals we had, and I think we've performed, based on those goals.

R. Coleman: As the minister knows, goals and planning are an ongoing evolutionary process that takes place year on and year off. What provisions has the ministry got to move forward into some process for public debate or public disagreement to develop goals for the future of the ministry from here -- outside of the jobs and timber accord, which we'll obviously discuss when we get to that section, and some of the things that were implemented as a result of that? What about the ministry as a whole and its processes for establishing those goals and objectives that can be measured for the entire ministry rather than just relative to one accord?

[1555]

Hon. D. Zirnhelt: Well, the goal in the short term, basically, is to get costs down, so we're working on that with industry. We have a number of suggestions and ideas that we follow up on with that. On the cost-driver initiative, we have

[ Page 13817 ]

over 800 suggestions. So to act on those suggestions is one of the goals. For the long term, the ministry's goal will be to complement the work of the public review of forest policy that we will undertake.

But the short answer is that we don't hold a public consultation every year to determine what the short-term operational goals of the ministry are. They carry on the programs that they have until we make a policy shift -- such as, for example, the two years' wood ahead. Then the ministry takes that as a goal and subsumes that into their operations.

R. Coleman: A number of months ago various groups were making presentations to the Premier and Mr. Wouters relative to the industry -- including the independents and some corporate people, as well as COFI and what have you. I'm wondering what the minister and the ministry's participation in those meetings were.

Hon. D. Zirnhelt: We had ministry staff at most, if not all, of those sessions. As you know, the short-term forest action plan was overseen at the technical level by the Deputy Minister of Forests, the CEO of Forest Renewal B.C. and the jobs and timber accord advocate's office, which has a number of staff people. They were there when there were major consultations. Any subsequent meetings -- by way of clarification and so on -- had ministry staff participating. We had a team in the ministry that backed up those discussions for information.

R. Coleman: It would seem to me that it was a pretty interesting initiative on behalf of the Premier. Where was the minister's involvement -- not the ministry's -- in that process and those presentations? What input did the minister have into it?

Basically, what drove that agenda? Was it ministry-driven or was it Premier's Office-driven -- the decision that we should start to meet with industry? It would seem to me that the person that's responsible for the Ministry of Forests, who is the minister himself, would be in attendance or be tightly involved in that process. I'm just wondering where the initiative came from and what drove that initiative.

Hon. D. Zirnhelt: I think, because of the difficulties in the forest industry and the importance for the province, it's quite appropriate that the Premier be involved and show an interest and concern. I was at all the meetings that the Premier attended. At those meetings we had the key committee that I mentioned just before. That committee went away and did more work and held further consultations. So the process was fairly simple.

We invited all those people we met with to prepare submissions, which came not to myself and the Premier but to the committee. Anything that it looked like we could make a policy change around went to the Ministry of Forests for policy development, which then came to me as the Minister of Forests. If I needed to take any of those policies to cabinet, I would; if I needed to go to other ministries, I would. But it was all executed and implemented by the Deputy Minister of Forests.

R. Coleman: So this was an initiative of the Deputy Minister of Forests and not the Premier's Office -- that these meetings took place?

[1600]

Hon. D. Zirnhelt: No, I didn't say that. I said there were a series of meetings that the Premier called to kick off the process. Then into the process some four or five weeks, the Premier and I held meetings again to hear a second round of consultations with the groups. In between those meetings that the Premier and I held with the various stakeholders, there was a series of specific meetings that were held by the technical team that was backing up the consultation process. I have said that that's the timber jobs advocate, the Deputy Minister of Forests and the CEO of FRBC.

R. Coleman: I just want to be clear whose initiative it was for the first set of meetings. Was it a Premier's Office initiative or was it an initiative of the Ministry of Forests to have those meetings with the various people that attended them? I guess the supplemental question, to save having to just keep asking the questions, would be: who selected the presenters to the meetings with the Premier? Who decided who and what would come and make those presentations?

Hon. D. Zirnhelt: I selected the people and gave instructions to the person calling the meeting, which in most cases was the timber jobs advocate. I discussed the list of invitees with him; I take responsibility for the list. The creation of those lists was my initiative, but it was with the full involvement of the Premier. I discussed the process with the Premier. He gave me general direction, and I came up with recommendations and gave lists which would guide the timber jobs advocate. Of course, he had some opportunity to recommend additions, as did the deputy and the other member of the technical support staff.

R. Coleman: I think the first part of my question still hasn't been answered. Was this the Premier's initiative or a Ministry of Forests initiative?

Hon. D. Zirnhelt: It was a joint initiative.

R. Coleman: That's probably about as close as I'm going to get.

What happened to the submissions that were made? How were they circulated? Were they broadly circulated? Were they tightly held in circulation, or . . . ? What happened to the presentations that were made by the various proponents at those meetings, and is there a list available of those presenters?

[H. Giesbrecht in the chair.]

Hon. D. Zirnhelt: We could probably make up a list, but it wasn't a bureaucratic process. It wasn't a royal commission. It was designed to focus . . . . And I think the validation of the short-term forest action plan by a broad range of stakeholders validated the process. We did not share or publish the submissions or anything. We asked people to make submissions, and we asked them to share those submissions with other stakeholders.

R. Coleman: So the circulation was relatively broad, then. It would have been to ministry staff, to stakeholders. These particular submissions that were made to these meetings were obviously broadly circulated so that a lot of people got an opportunity to have input back from them. Or was it just to other stakeholders and to the minister himself?

[ Page 13818 ]

Hon. D. Zirnhelt: No, I want to correct that, because I didn't say anything quite like that at all. I said that in those meetings there was an invitation from the Premier and me for stakeholders to provide submissions to the technical team. The technical team and the Premier and I all encouraged those people who prepared papers to share them with those they'd like to share them with and conduct discussions amongst themselves.

We did not go through a bureaucratic process of registering a submission, publishing it, putting it on a list and circulating it broadly. We did not undertake a broad circulation of all those policies. The short time frame dictated that we had to focus on some actions. And I can give you, for example, the list that the northern mayors came up with, which they submitted. We were able to act on slightly more than seven -- partially on the eighth -- of their recommendations. I think they published that in the newspaper themselves, and they circulated that amongst their members and I think have made it generally available.

I think it's a mixed bag -- where these papers are. The papers that were submitted belong to those people submitting them. We did not ever pretend that we would make all the submissions available. But as a rule, in addition to the local governments, we had some submissions from environmental groups, from labour groups, from independent sawmillers, from the value-added sector, truck loggers and the Council of Forest Industries. I can't think of any others, actually.

[1605]

R. Coleman: As I understand it, that then led to additional ministry discussions that led you to publish what is known as the forest action plan. Is that correct?

Hon. D. Zirnhelt: That's pretty much it. We took what we thought we could act on -- and where there was enough consensus -- and moved on those. They became the short-term forest action plan.

R. Coleman: For opening questions . . . . Although I have a plethora of others, I think that they will be picked up as we go through each one of the sections that the critic has outlined to the minister. So we will obviously canvass those. I would reserve the right to come back and ask some general questions relative to these as some of the items highlighted in various reports relative to forestry that I've gone through come back to bear . . . . I'll discuss those as we go through them.

G. Abbott: The member's questions were useful, because they lead into the next area that I want to canvass here. That's around the 30-day process and the 90-day process. The 30-day process was to identify those things which could be done on an immediate basis to provide assistance to the industry. The 90-day process, as it was known, obviously was concerned with longer-term issues around the strength of the industry, competitiveness and so on. The thing gets confused, of course, because not surprisingly the 30-day process ended up taking about 90 days. I guess the 90-day process has kind of melted into the broader processes that we have been previously discussing.

Just to put some issues around the 30-day process to bed, was there the creation of any sort of committees or a committee structure to look at the many suggestions that were put forward by stakeholders in that 30-day process? Is there a committee structure? Are some of the committees still outstanding in terms of their reporting?

Hon. D. Zirnhelt: No, there was no elaborate committee structure set up, as may have happened under the forest sector strategy before. It was quite an informal process. After the Premier and I met with the groups to kick it off, the detailed consultation took place under the auspices of the three key officials that I've mentioned several times. If there was policy work or analysis to be done, it fell largely to the Ministry of Forests. The deputy minister would have a committee of officials do the work, and we'd report back. It was very much an iterative process. The results are the decisions we took under the short-term forest action plan.

G. Abbott: As the minister notes, some of the suggestions that were made by various stakeholders as part of the 30-day process have found their place in the forest action plan. Are there issues, suggestions or proposals from that 30-day process which are still under consideration by the ministry, or in the minister's view, is that process complete?

[1610]

Hon. D. Zirnhelt: That short-term process is substantially complete, although there is continued work being done on three elements. I would mention the cost-driver initiative, which I said we've just recently summarized. We've received some 800 suggestions for follow-up items. These are some suggestions that we probably didn't have the first time around.

The market pricing system. We're looking at how that is achieving the goals and making adjustments as we go there. Then there's the mill closure review process, which really came out of that, and that's ongoing. If there's a mill closure, we'll review it -- those mills. Those are three examples of where the follow-up is taking place.

G. Abbott: The 90-day process, which was the longer-term stuff -- and the minister can correct me on this -- seems to have melted into the bigger process, which is pending, I guess, at this point. Is that a fair assessment, or is there an ongoing 90-day process? I gather that it has just melted into the future process, but the minister can correct me if I'm wrong.

Hon. D. Zirnhelt: Let me try to give you some perspective. You're right: the 30-day process took somewhat longer. When the Premier met with them, he said: "Okay, there's some urgency here." He was getting the message that it was urgent. So he said: "Okay, let's have the short-term stuff in 30 days, and 90 days later, let's have your suggestions for the long term." We didn't get that. Hence we had to design a process. There are one or two people . . . . I think the IWA have put out a substantial piece, but I understand that COFI is still working on theirs.

It was put back to stakeholders to come forward with suggestions. Had we had suggestions from the major stakeholders, we'd be able to get into a technical review of those at this point.

I think people concentrated on making effective the short-term forest action plan, knowing that it would take somewhat longer than 90 days, certainly, to complete it. But I think we went into it . . . . The Premier certainly wanted us to get on

[ Page 13819 ]

with as much work as we could, because he heard two messages. There's the short term, but there are some things that are going to take longer. The 90-day process really symbolized that. But, of course, it became clear that it was going to take longer, and that has flowed into a longer-term process that's going to take us, I suggest, more than six months from now. But certainly it has to be completed in time -- at least some of the parts of it would have to be completed -- so the negotiations for the replacement of the softwood lumber agreement can carry on.

G. Abbott: As the minister noted, the IWA provided their White Paper very recently -- certainly April or May '99 -- for their discussion of tenure and stumpage reform. I understand that the Truck Loggers Association is very close to releasing its paper on tenure and stumpage reform. And COFI? -- I don't know. I presume they are probably getting close as well. Is the suggestion, then, that the ministry is going to review those submissions and, presumably, other long-term suggestions for reform? Will those be reviewed independently of any new process that may be announced around a public review of forest policy in British Columbia, or are we talking about one and the same bigger process?

Hon. D. Zirnhelt: As the member can appreciate, there are different levels of technical debate. Some of the policy debates are around values and objectives and that sort of thing. It will be a bit of both. What will happen with the IWA paper . . . . It's a version of a draft that's been around. When we receive it, it goes into some analysis so we're ready to respond -- so if I'm called upon to respond to some ideas, we have some ideas and some views. We will conduct some analysis as it becomes available. If the truck loggers produce one, we'll immediately start some analysis.

[1615]

I don't think we'll complete any work on any of these ideas, unless it's under the rubric of the public review. But if somebody comes up with a policy that we can implement in the next month and it's a good idea, we may well be able to advance the action on it. As I said in the earlier discussions, we don't want to be imprisoned by waiting for a long and involved process if there's something we can do now.

Today you will note that I tabled legislation that enables pilots of a performance-based code. So we're going to move on that. Of course, that's part of the long-term action plan and part of the objectives that were set when we sat down and met with the various stakeholders.

G. Abbott: I want to discuss some of the suggestions that were made in the 30-day process and review the extent to which the government has endorsed the suggestions, which is fairly easy to determine. A little more difficult is the success with respect to the implementation of those suggestions. There's been a ton of suggestions made, so that makes it a little difficult to know where to stop and start.

Among the more important suggestions that were made were those that included, for example, how to limit future cost increases to the industry. One of the concerns that was raised, I suspect not only by COFI but by others, was provincial electricity rates. Has the government moved to try to deal with electricity costs in British Columbia? What initiatives have been approved to date, and what initiatives in that regard are still being contemplated?

Hon. D. Zirnhelt: The example that the member gave, really, was one of those things that was punted off out of the short-term process to be considered for the budget. As the member knows, the Minister of Finance chose not to reduce hydro costs, because generally we have the lowest costs in North America. But those kinds of considerations, around the impact of items like that, can be reviewed during a long-term policy review.

G. Abbott: Likewise, there was a concern around discharge and emission fees. Those have increased, of course, over time, and the concern is that any increases in those fees need to be limited or eliminated. Is there any initiative by the government or by this ministry to get agreement with other ministries or agreement across government with respect to discharge and emission fees?

Hon. D. Zirnhelt: No, not at this time.

G. Abbott: Do discussions continue with respect to that issue, in hopes that there can be some agreement by government or a protocol by government on avoiding those kinds of increases in the future?

Hon. D. Zirnhelt: No, the Ministry of Forests isn't, because we are not the experts on impact on air quality or on water quality by emissions. It would be something that would be undertaken by the Ministry of Environment.

[1620]

G. Abbott: I presume that the minister's response would be the same with respect to the issues around pulp mill effluent and the obligation to move to a zero-AOX standard effective December 31, 2002. Is that the case? Certainly this is a very big issue for the pulp and paper industry in British Columbia. The zero-AOX requirement is probably going to involve at least a billion dollars in capital spending.

It's not at all clear at this point that a cost-benefit analysis has been done to demonstrate the value of this, and certainly zero-AOX would put us in a completely different regulatory realm than other jurisdictions in the world. Can the minister advise what his ministry is doing with respect to zero-AOX? Is it something that they are leaving entirely in the hands of the Ministry of Environment? Or does the ministry contemplate taking -- or have they undertaken -- some action with respect to this issue?

Hon. D. Zirnhelt: Again, the responsibility is that of the Minister of Environment. But I can say that as part of the long-term policy review, we'll be looking at the need to have a pulp strategy that would look comprehensively at the regulatory regime, timber supply, cost structures and so on. We really will look at competitiveness issues in that long-term forest policy review. That's where we'll touch on that, but the responsibility for the regulation is still with the Minister of Environment.

G. Abbott: It's certainly an issue that will come into play in terms of competitiveness, because it does lead inevitably to a product which has been tried elsewhere and which hasn't met any appreciation in the marketplace. I think there are a lot of problems which have not been properly worked through with respect to the zero-AOX initiative.

My understanding is that the zero-AOX issue has been given to the job protection commissioner for his consideration.

[ Page 13820 ]

Is the minister familiar with that delegation? Has the ministry provided any comment to the job protection commissioner with respect to that?

Hon. D. Zirnhelt: No, I'm not aware of the issue having been delegated to the job protection commissioner.

G. Abbott: I want to just talk about some of the areas where some progress has been made with respect to the 30-day proposals and the forest action plan, where a number of the suggestions have become short-term policies or solutions. The equalization of stumpage over a longer period . . . . The ministry has certainly committed to that in the forest action plan. Has the policy been implemented? Is it in place now, and is it in place for keeps? Or is it something that is only going to be there for a time?

[1625]

Hon. D. Zirnhelt: Companies were given an extra 90 days on top of the 21 days to pay, for a total of 111 days. A few weeks ago that 111 days expired, and companies are now signing monthly payment plans, depending on when it's best for them. If they're doing winter logging, then they'll want it in place later this fall. So the deferral has been phased out, and it will be completely phased out by the end of this fiscal year.

G. Abbott: The issue of permits for water-bedding burnt wood was also something that found a place in the forest action plan and certainly was appreciated in instances like the Salmon Arm fire, where there's a substantial amount of wood that, I guess, otherwise would've been water-bedded. It's not a huge cost saving, I don't think, but relative to a particular area, it certainly adds to the opportunity to deal with the burnt wood situation.

Is it correct that the policy around not water-bedding burnt wood is for '99 only? Does it have to be renewed in 2000, or this going to be an ongoing policy of the ministry from this point on?

Hon. D. Zirnhelt: The burnt-timber provision was implemented on January 1 as a one-time only reduction. Industry asked for an additional year, and we have granted that. So it's going to be a two-year program.

G. Abbott: Is there a particular reason why we would not take the policy around not water-bedding burnt wood and make it an ongoing policy? Why would we limit it from year to year?

Hon. D. Zirnhelt: Well, it was a one-time effort because of the fact that it attracts attention, and we have to explain why we're doing it -- why we're not water-bedding. So it was seen as a short-term action. Failing that, the timber evaluation for dead-and-down and the appraisal system will pick up and generally be good enough for the distribution of pricing over the classes of logs.

G. Abbott: Is that another way of saying that making it a permanent policy might arouse American suspicions and concerns as part of the softwood lumber agreement?

Hon. D. Zirnhelt: Yes. Every quarter we have to file policy changes with the U.S. government, so to do this repeatedly would require explanations and so on. I think, as I say, it was because of the amount of burnt wood last summer that it was seen as a function of good forest management to encourage the harvesting of that wood on a timely basis.

G. Abbott: I think the minister is right that it was a sensible piece of public policy, given the situation, the amount of burnt wood and so on. I'm happy to say I hope we never see a summer like last one, but chances are we will. Chances are we'll have significant volumes of burnt wood again. I won't hope it's anywhere in the province, but there will be a volume of burnt wood in the north or the east or somewhere in the future that we have to deal with.

If the Americans don't give us any signal of concern here, and I would hope they wouldn't -- it seems like a pretty commonsensical and small-potatoes thing for them to be grieving . . . . If they don't grieve -- if they don't protest -- is this something that we could look forward to having enshrined in permanent policy and not having to be the product of negotiation from year to year?

[1630]

Hon. D. Zirnhelt: Well, I don't advise the member to bet on it. We just received 40 questions -- four pages, single-spaced -- on the short-term forest action plan.

G. Abbott: That's interesting. Obviously they're nothing if not thorough in their perusal of our policies. Among those 40 questions, was there one with respect to water-bedding burnt wood?

Hon. D. Zirnhelt: Yes.

G. Abbott: Another one of the proposals was the elimination of water-bedding on pulp log volumes. I think this found its way into the forest action plan, but I may be wrong. Could the minister advise whether it has, whether it's been implemented and whether it's a long-term change?

Hon. D. Zirnhelt: That was the X-grade logs. That would have been a huge revenue reduction, so it was a sizeable request from industry. Instead, we set up benchmarks for the amount of waste they can leave behind and handled it that way, so that the marketplace would determine whether or not they harvested that grade of log.

G. Abbott: That was where we went, I guess, with respect to the proposal about change utilization and stumpage treatment of X-grade logs and eliminating them from water-bedding. So the policy has not changed with respect to water-bedding pulp log volumes. But I know the utilization standards were changed with respect to the X-grade logs. Is that correct?

Hon. D. Zirnhelt: Yes, that's correct.

G. Abbott: Is that permanent, or is it subject to renewal every year as well?

Hon. D. Zirnhelt: It is to be reviewed every six months. We've renewed it. We are conscious of how much merchantable waste might be left behind; that's why we've built in a review process.

[ Page 13821 ]

G. Abbott: There were many suggestions made with respect to cost off-loading. One of the very important areas there, of course, is the Forest Service roads and how they are going to be funded and managed. I think we have that as a separate

section in the estimates coming up later on, so we'll leave that aside for now. But there are a number of other areas where I think we need to have a brief discussion of what the impact is going to be.

Among those areas that are of particular concern is the identified wildlife management strategy that was jointly announced by the Minister of Forests and the Minister of Environment several months ago. As I recall, the suggestion was that the strategy would cost no more than -- I can't remember -- a dollar per cubic metre, or something along that line. Where do we sit in terms of the identified wildlife management strategy, its implementation, its costs and so on?

[1635]

Hon. D. Zirnhelt: The identified wildlife strategy, as you know, is not a new initiative. It was part of the code; it was always intended to be there so that the code could be implemented. There is a commitment to try to live within 3 cents a cubic metre across the province. There is an implementation committee that has on it the Ministry of Environment, Lands and Parks, the Ministry of Forests, industry interests and environmental interests. They're putting together a strategy to implement a way of trying to reduce the costs that might spike for specific species.

If one company in one area happened to have a specific danger to a threatened species, they'd have to absorb all the costs. They're trying to find a mechanism to ensure that the high-cost areas have been mitigated in some way.

G. Abbott: The 3-cents-a-cubic-metre figure -- was that intended to be an average across the province? I presume it was. To follow up on the minister's answer, I gather that what the committee will attempt to do is ensure that those areas of the province that have species at risk or other problems in that area will not be unduly penalized by this strategy. Is that what's being attempted here?

Hon. D. Zirnhelt: Yes. Anything over and above the 3 cents, we're attempting to keep within those bounds. The attempt is to ensure that people who are hit inordinately, in terms of cost increases, can find some mitigation. That's the intent of the strategy that's being implemented by this committee.

G. Abbott: The federal government, I understand, is contemplating -- or perhaps has introduced -- a wildlife management strategy of its own. Is it clear to the ministry at this point how those two would mesh in practice?

Hon. D. Zirnhelt: It's too early to tell how those two initiatives are going to mesh, but clearly we want to have strategies in place that will hold off any intrusive efforts by the federal government.

G. Abbott: I don't know if the two governments are still talking, but are they talking about this particular area of public policy? Are there ongoing discussions between the ministry and the appropriate federal officials to ensure that the federal regulations, if and when they are put into place, will not prove onerous to the B.C. forest industry?

Hon. D. Zirnhelt: In order to get into some detail on that, I'll have to get the appropriate official here. But from time to time there are discussions. The discussions are led by the Ministry of Environment, and they do consult with us with respect to the impacts on forest harvesting.

G. Abbott: The other element that has been under discussion for some time -- I believe we talked about it in last year's estimates as well . . . . The guidebook on coarse woody debris is an initiative by the Ministries of Forests and Environment. Where does that sit currently? Is that in place now, or is that still an item to be negotiated?

[1640]

Hon. D. Zirnhelt: The guidebook on coarse woody debris needs a lot more work done on it, and it'll take some time for that work to be done.

G. Abbott: It sounds like we won't be seeing it for a while. Is there an objective in the ministry at this point in time to ensure that if and when we do see the guidebook, the magnitude of costs associated with it will be like the identified-wildlife management strategy -- in the pennies? Or are we looking at a more costly item there?

Hon. D. Zirnhelt: We will be looking at the cost implications. There may be cost savings by having the ability to leave coarse woody debris on the forest floor. So we don't know yet until we complete the guidelines as to what the impacts might be, but that will be looked at.

G. Abbott: The watershed assessment procedure guidebook is also under the code. The possibility of that providing a new cost element is significant. Where does that guidebook currently sit in respect to provincial policy?

Hon. D. Zirnhelt: We have to wait a couple of minutes. I wonder if we could call a short recess, and the official will be here.

The Chair: Does the committee agree to a . . . ? Is it five or ten minutes?

Hon. D. Zirnhelt: Just five.

The Chair: A five-minute recess. Hearing no . . . . The committee is recessed for five minutes.

The committee recessed from 4:42 to 4:48 p.m.

[W. Hartley in the chair.]

Hon. D. Zirnhelt: I think I have the answer to the member's question. The watershed assessment guidebook has been out for about a month. We agreed that industry would be involved in evaluating the appropriateness of it, and I think the answer has been that industry agrees that it addressed the issues and concerns. The basic thrust was to reduce the number of planning phases from three to one. So there actually should be a cost saving involved as a result of this guidebook.

G. Abbott: The question was on the watershed assessment procedure guidebook. Perhaps the answer addressed

[ Page 13822 ]

that, and I just missed it. But in the event that we have the right staff person here to comment on any discussions with the federal government about their wildlife management strategy, that would be useful as well. The question was on the watershed assessment procedure guidebook -- whether discussion is still continuing on that or whether it is now in place.

[1650]

Hon. D. Zirnhelt: We've got two things underway here. Yes, it was the watershed assessment procedure guidebook, and the review procedures under that are really complete. COFI had a staff member who was working with us on that.

With respect to endangered species, the federal government was going to introduce it last session. They didn't. I understand it is now the fall, and there may well be -- in fact, we would argue that there should be -- discussions if they're to make any modifications to what they last consulted with us about. We expect that they would talk to us. In fact, we will try to require that they talk to us about it.

G. Abbott: I'm sure we'll come back to discussing this point in a later section, so I'm just looking for a brief update on it at this point in time. We'll likely come back to this when we're talking about

section 5 of the code in the estimates.

One of the suggestions made in the COFI presentation to the ministry was around establishing a one-window approach for obtaining government approvals under the Forest Practices Code. Now, this would certainly seem to be, in spirit, at least, in line with the policy changes around Bill 47 and so on. Where does this proposal sit with the ministry right now? Is this still being considered?

Hon. D. Zirnhelt: In principle, we recognize the need for there to be an efficient approval process -- hence the idea of one window. So in principle we believe that that objective is the target. First, under that, we looked at the two-year wood ahead -- expedient approval of the amount of wood under permit. We've achieved that, and now we're concentrating on the cost-drivers initiative. To the extent that one window -- one place where approvals are taken -- helps that, then we are focused on that.

G. Abbott: The specific concern, of course -- and it's not a new one -- has been around as long as the code has been around, I guess, in that both the Ministry of Forests and the Ministry of Environment are charged with administering and enforcing particular aspects of the code. I guess we wouldn't have this problem if we were in Ontario and we had a ministry of natural resources, or whatever it's called there. I don't know that we need to amalgamate the ministries to achieve this objective, but . . . .

I guess the question is whether there is . . . . Is there some outstanding principle or outstanding policy objective which compels us to keep the two-window approach? I guess the minister's indicated that, from a cost perspective, this is something that we would want to move to. Certainly if that's what he was intending to say, I agree. I think the simplification of the process is something that would always be welcome here, and I'm not sure we're ever going to be able to get it when we have at least two ministries and perhaps at times, with Fisheries involvement now, three.

Are we moving to a one-window approach? What are the constraints? What are the limitations? What's holding us back from undertaking that?

[1655]

Hon. D. Zirnhelt: Well, the only impediments are where there's a substantive reason why some agency charged with some responsibility needs to make an approval. In the case of joint sign-off by Environment and Forests in community watersheds, it's reasonable. As I explained -- I think last year, or maybe in debate on the bill -- you could have the Ministry of Forests do it, but they'd have to then refer to somebody with the background and knowledge underneath that one window. Behind the window there are going to be a couple of people, so I think we end up splitting hairs.

The intent is that you make the approval process as efficient as it can be. So the assistant deputy ministers of operations in both the Ministry of Forests and the Ministry of Environment have been working with industry associations that are trying to find ways to expedite decisions and what you might call sort of the one-window approach.

G. Abbott: I'll leave that particular issue, because I'm sure we'll be coming back to it in some form in the discussion of the code and recent initiatives to improve the code.

The final area I want to talk about briefly, on the 30-day process, is the suggestion about providing relief from annual cut control constraints. In the current situation, if a company cuts below 50 percent of its AAC, it can obviously lose the amount of that cut permanently. One of the suggestions was for relief from that constraint. I gather that for the short term at least -- at least for the purposes of the 30-day package or the forest action plan -- there is no contemplation of relief from the cut control constraint.

I should have the minister confirm that, but assuming that he does confirm that, this strikes me as an interesting area for further consideration in either a 90-day process or the broader review of forest policy in this province. It would seem to me that it may be a move towards greater market sensitivity, which might be appropriate. But I would welcome the minister's comments with respect to that issue generally and where we sit currently on it.

Hon. D. Zirnhelt: I believe that a 50 percent reduction in any one year is a significant reduction. We don't have that by way of average, so there are some cases where there's an anomaly. But we do hear from people who say: "I can cut that." So it's a function of volume.

There are two aspects to market sensitivity. There's volume -- how much volume the market can absorb -- and then the question is: at what price? Hopefully, as we review the long-term policy, we might find ways of making the stumpage system more sensitive, so that the stumpage is less and therefore you can cut more because you have more of a market at a lower price. But what we experienced over the last two years was that there was a very real limit, regardless of price. There was only so much that was going to be bought by, say, the Japanese.

It's a very difficult issue, because there are people -- in particular, some of the workers in the IWA -- who would argue from time to time that we should perhaps have tighter cut control. If there's only 50 percent being cut in one year, that means that half the jobs are gone, at least on the harvesting side.

G. Abbott: Just before we move on to the U.S.-Canada softwood lumber agreement . . . . The minister noted earlier

[ Page 13823 ]

that three elements that were still outstanding with respect to the 30-day proposals were the cost-driver initiative -- which I guess is a matter of general discussion with the industry -- the market pricing system and the mill closure review process. The latter -- the mill closure review process -- I presume is an ongoing issue with the industry. Is the market pricing system what one might term a broader issue of public policy which might find its way into the longer-term discussions?

[1700]

Hon. D. Zirnhelt: Those items were ongoing as opposed to outstanding. The market pricing system was a change for the small business program, and we're going to continue to evaluate it. So it was only for the small business program, although it'd be very interesting to design a pilot somewhere on market pricing under some of the other licences rather than just the small business program.

G. Abbott: I appreciate the minister's clarification on the market pricing system -- that it is in relation to the small business program.

That does prompt another question to the minister on that specific area, although we may come back to it again. I know the minister has received some correspondence, because I receive all the cc copies he gets about the impact of the new system. Has it produced a lower stumpage on those sales? I know the intent is to make it more market-sensitive, but I'm advised that a fair percentage of the time it actually produces stumpage rates as high as or higher than it would have under the old system. Is that the case? Is that the experience of the ministry to date with the new pricing system?

Hon. D. Zirnhelt: The net effect is that we're up to 98 percent of the wood being sold. So the market pricing system just sets the upset price. The market bids competition; the competitive process sets the final price -- sets the bonus, as it were. We're telling you that basically 90 percent is being sold, so we're getting awfully close to 100 percent being sold at a price that's competitive, and that has to reflect the market.

G. Abbott: I'll leave that aside for now. We may come back to some discussion of that when we're looking at the small business forest enterprise program a little more closely later on. I think we'll leave that aside for now.

What I want to do is move to a few questions I have with respect to the possible renewal and certainly the renegotiation of the Canada-U.S. softwood lumber agreement. It's been in the news lately -- some headlines about the Premier wanting to get out of the agreement or the Premier not wanting to sign a new softwood lumber deal. Generally, after you look a little bit more closely at the articles, the actual quotes are rather less dramatic than the headlines might suggest. However, I guess it does certainly prompt some questions about what we want to achieve with a new softwood lumber agreement.

I guess the first question is this. We went, I'm sure, into the last agreement with the best of intentions, but clearly there were some unintended consequences -- or perhaps it was just the nature of world markets and particularly the collapse of Japan's. But it has put us very quickly -- in fact, I guess, only a year into the agreement -- into a whole new realm of market realities with the collapse, particularly of the Japanese and other Asian markets.

Perhaps I'll begin with a general question. To what extent has the existing agreement met the province's aims from 1996? What, in the minister's view, have been the unintended consequences of the softwood lumber agreement?

[1705]

Hon. D. Zirnhelt: Well, the unintended consequences would be driven by that external event -- the collapse in the Asian market -- which left those people who were actually very satisfied with their situation in life at the time when the interior people and those who needed to export in the United States had to have an agreement to protect their access to the market . . . . The unintended consequences are that people who had other markets don't have quota. They haven't got the U.S. market, except at some considerable penalty to themselves.

If there is one unintended consequence, it is that it doesn't cover all the people who would like to have had access to that market. I hasten to remind the member that those people, particularly on the coast, were not concerned and did not want to be part of it. They thought it was onerous and actually were glad they didn't have the problem. Now it looks pretty good to those people on the coast.

G. Abbott: In the realm of unintended consequences, I would certainly include, if asked, the ongoing problems -- the ongoing disputes -- we are having with the Americans around what is or what is not a value-added product deserving exemption under the agreement. Would the minister also consider these disputes around value-added products to be one of the . . . ? I don't know if it's an unintended consequence, but it has certainly been an unanticipated issue, as far as I know. Would the minister share that view?

Hon. D. Zirnhelt: I don't think anyone predicted the number of annoyances that we were having around the definition of products, as to what is covered. I think the genuine shippers of value-added products are penalized by the fact that there are -- as industry has acknowledged -- some cheaters who minimally add value and attempt to, in effect, circumvent the agreement.

Yes, there are consequences that were not foreseen. I think there is a genuine feeling that true value-added products would not be stopped. I think we're finding that, in an attempt to stop some kind of attempt at moving through a loophole, the United States has chosen to overreact and block off access to legitimate products. That truly is an unintended consequence.

G. Abbott: I think we'll come back to the resolution of the value-added issue as we talk about aims and objectives for the coming round of negotiations.

I also want to ask about limitations on the ability of the government of British Columbia, in particular, to provide stumpage relief. When the agreement was negotiated and signed, was there a clear understanding on the part of the provincial government that our ability to shift or to reduce or relieve stumpage payments -- or indeed to revisit the whole nature of our stumpage policies in British Columbia -- would be limited by the agreement? Was that clearly understood when we went into it? Or again, are we in the realm of changing circumstances and, as a consequence, of changing perceptions of the agreement?

[1710]

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Hon. D. Zirnhelt: We did not acknowledge and don't acknowledge that they have any jurisdiction or domain over things like stumpage fees. That's domestic policy. But the softwood lumber agreement has a clause in it that says that we can't do anything that has the effect of offsetting the export fees. We can't do anything to offset the export fees on wood above the quota.

G. Abbott: The issue of domestic control over stumpage was a concern on June 1, 1998, when the reductions in provincial superstumpage were announced. It certainly was a concern then that the Americans would respond with some kind of protest or charge or whatever they do. As we've been discussing the stumpage or the market timber pricing system in B.C., there have been some concerns expressed that we have to be careful about how we do this or that, because the Americans may protest. Am I misunderstanding some of the signals that came out earlier, or are there constraints around our ability to manage our stumpage policies under the softwood lumber agreement?

Hon. D. Zirnhelt: This is the very point that is being discussed and on which we've had consultation, which ultimately went to arbitration. When we made the reduction in stumpage, we said it was to deal, in part at least, with unintended increased costs, which we estimated to be about $5 a cubic metre, when we brought in the Forest Practices Code. We intended to address that issue through the stumpage reduction, and we still argue that it is our position. We argue that vigorously. But the United States chooses to cite

article 7, which is the circumvention clause. It says in

article VII(2) in the general provisions: "Neither party shall take action to circumvent or offset the commitments set out in this agreement, including actions having the effect of reducing or offsetting the export fees provided for in

article II(2) or undermining the commitments set out in

article I." It is a question of

interpretation of the agreement. It's our point that we haven't circumvented the agreement