1989 Legislative Session: 3rd Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, APRIL 12, 1989

Afternoon Sitting

[ Page

6035 ]

CONTENTS

Routine Proceedings

Ministerial Statements

Feasibility study on new steel production plant. Hon. Mr. Veitch –– 6035

Mr. Gabelmann

Vancouver Island gas pipeline. Hon. Mr. Davis –– 6037

Ms. Edwards

An Act to Merge the British Columbia County Court and the British Columbia

Supreme Court (Bill M206). Mr. Sihota

Introduction and first reading –– 6037

Presenting Reports –– 6038

Oral Questions

Deficiencies in log scaling. Mr. Miller –– 6038

Forest industry inquiry. Mr. Kempf –– 6039

Sale of Westwood land. Mr. Rose –– 6039

Auditor-General's report on privatization process. Mr. Bruce 6040

Presenting Reports –– 6040

Committee of Supply: Ministry of Government Management Services estimates.

(Hon. Mr. Michael)

On vote 31: minister's office –– 6040

Mr. Perry

Mr. Cashore

Mr. Rose

Mr. Lovick

Hon. Mr. Strachan

The House met at 2:06 p.m.

Prayers.

HON. MR. VEITCH :

In the members' gallery today are two very good friends and neighbours

of mine, Dr. Egon Nikolai and his wife Fern. Accompanying them are Dr.

Chuck Mielke of West Vancouver, Dr. Perry Trester, president of the

College of Dental Surgeons of B.C., and other members of the executive

of the dental college. As well, in the visitors' gallery are my

ministerial assistant's mother and father, Mr. and Mrs. Pescod from

Nanaimo. I would ask the House to make them all welcome.

MR. BRUCE :

Last week I had the pleasure of introducing one of my fine constituents

from Lake Cowichan. She enjoyed herself so much here the other day that

she came back again and this time brought her husband. Would you please

welcome Mr. Barry Volkers from Lake Cowichan.

MR. SERWA :

Mr. Speaker, hardly a day goes by in the House that we don't miss our

dear friend and colleague, Alex Fraser. It's a pleasure to see a blaze

of yellow daffodils in the House today recognizing April as

fund-raising month for the Canadian cancer campaign. Today I would like

to introduce, along with my wife Lois, in your gallery, Sheila

MacDougall, the president of the Victoria unit of the Canadian Cancer

Society. Would the House please make them welcome.

MR. PETERSON :

In your gallery are two very good friends of mine whom I would like to

introduce to the House, Roselyn Cherneff and Charlie Johnson. Would you

please join me in making them very welcome.

Ministerial Statement

FEASIBILITY STUDY ON NEW

STEEL PRODUCTION PLANT

HON. MR. VEITCH :

I wish to inform the House today of an important industrial opportunity

that my ministry is responding to, one which provides an opportunity

for sustainable development in the province.

I've been in

discussion with senior representatives of an established world-class

steel producer that wishes to explore preliminary feasibility of

building a major steel production facility in British Columbia using

advanced environmentally sensitive technology. This represents one of

the most significant opportunities ever presented to this province, but

is an opportunity we must pursue with utmost car to ensure that our

environmental objectives are harmony with developmental objectives.

If this is achieved, we will be displaying eve further leadership in the concept

of sustainable economy development. This concept, which has been endorsed nationally

and internationally, means economic development where environmental priorities

are paramount. It means economic development that ensures prosperity, that secures

security and a viable quality of life for our children and is consistent with

the government's regionalization objectives in helping to recession-proof

the province of British Columbia through diversification in each and every region

of this province.

Sustainable

development is a major theme of this government. As we emphasized in

the throne speech last month, it is important for us to test this great

opportunity against that vital philosophy, This opportunity is truly

exciting.

The plant would bring approximately $4 billion in

new direct investment and generate about 6,000 direct jobs in British

Columbia. In addition, many thousands of new spinoff jobs will result,

including the construction of housing wherever the operation is located

and hundreds of new mining positions in British Columbia.

have checked the bona fides of the proponent. They are impeccable, and

we are satisfied that the company is very serious and, without doubt,

capable of performance.

I'd like to review for the House

events to date. I held discussions with representatives of the

proponents on several occasions. A delegation from the proponent

visited British Columbia for a week in February. On February 20, the

proponent met with myself and, later on in the day, with the Premier,

myself and my deputy minister, Mr. Bob Plecas. The requirement to

develop an environmentally sound plant was stressed over and over

again. My ministry provided the company with technical and other

information, in particular information relative to the environmental

review process in British Columbia.

On March 31, I

received a letter from the proponent confirming their desire to

establish a plant in British Columbia and requesting our participation

in a preliminary feasibility study. I held further discussions with the

proponent's representatives. There have been no decisions and only the

most preliminary exploration of possible sites for the project, so I

cannot comment — nor will I comment — on what sites might, at a future date, be ruled in, or indeed be ruled out.

Interjections.

HON. MR. VEITCH : They don't want to hear this over there, Mr. Speaker. They don't care about jobs or the environment.

The first phase of this project would create 6,000 —

jobs, and all of these, except for certain management t positions,

would be filled by Canadian workers. Many more jobs would be created in

other sectors, especially in the B.C. coal industry, which would not

supply the lion's share of coal for them all. It's also fitting and

consistent with our economic strategy that this project would see

British Columbia importing raw materials — iron ore from offshore in this case —

[ Page 6036 ]

and

producing finished products for export; this is important, Mr. Speaker.

At the same time, we will be adding value to our own resources, because

millions of metric tonnes of B.C. coal would be needed to produce the

steel. As well, this development would stimulate exploration for iron

ore in British Columbia.

[2:15]

I'm sure this House will be interested in the fact that one of the

things that attracted this company to British Columbia is the fact that

this province is establishing new and exciting trading relationships

around the globe. Another most important factor is the confidence which

the international community has in the government of B.C. and in our

attitude toward sustainable development in a free market economy.

Another important point is that the company has not — and I want to underscore it — contemplated and is not contemplating any financial assistance other than the requested participation in the feasibility study.

have been in constant contact with the proponent, which I am pleased to

announce is the China Steel Corp. of Taiwan. This is a world-class firm

that British Columbia firms have been doing business with for many

years. China Steel has been looking at investments around the world,

and we're pleased to see the potential for a new, exciting,

environmentally sound opportunity here in the province of British

Columbia.

I have responded to this proponent by saying that

the government of British Columbia is indeed interested. However, I

have made it crystal-clear to the proponents that before any commitment

is made, before any feasibility study is undertaken, even before any

pre-feasibility study is undertaken, we must be satisfied that

technology is available that will protect our environmental values.

That's important to the people of British Columbia.

Interjections.

HON. MR. VEITCH : Again, Mr. Speaker, they don't seem to care. If it isn't their idea, they don't care.

I've

told the proponents that the project would have to conform to strict

environmental standards and take advantage of the best available

technology in today's world. To this end, I and my colleague the

Minister of Environment (Hon. Mr. Strachan) and eminent experts in

engineering and environmental science will review the technology and

personally visit steel mills in other parts of the world to learn what

can be expected of this type of facility. This team will include senior

officials of the Ministries of Environment, International Business and

Immigration, my own Ministry of Regional Development and the federal

government. It will draw on the university and professional communities

to complete the delegation. Members of the media will be invited to

travel with the team to view the opportunity firsthand and to conduct

their own interviews.

Interjections.

HON. MR. VEITCH : Mr. Speaker, the opposition's rudeness is only exceeded by its lack of concern for the people of British Columbia.

We've

been told that advances in technology mean that the steel industry can

shed its reputation for environmental compromise, but we want to see

firsthand this new technology and its impact, and we must be convinced.

Until

this team has done its work we will not commit to the feasibility

studies. However, to avoid delaying this project and its benefits to

British Columbia, my staff will in the meantime be having preliminary

discussions with the company on the terms for the first phase of the

possible studies. The first phase of the studies would include a

preliminary environmental assessment, and only if this assessment is

feasible would the rest of the study proceed.

The studies

also include assessments of markets, sites, infrastructure requirement,

socio-economic impacts and commercial feasibility. I don't want to

sound too cautious. Like other enlightened members of this House, I am

excited by the prospect of billions of dollars of new investments in

the province of British Columbia. I am excited by the prospect of a

huge, new export industry for the province of British Columbia. I am

excited by the prospect of adding value to our natural resources here

in British Columbia, here at home rather than overseas.

was not long ago that British Columbia was seen primarily as an

exporter of raw materials, sometimes described as "hewers of wood and

drawers of water." This is no longer the case. Because of the positive

action and leadership undertaken on many fronts by our government, we

are now poised to enter a new world of economic expansion which will

provide the type of lasting, fulfilling employment only dreamed of in

British Columbia a couple of short years ago.

British

Columbia currently has the opportunity to import raw material, process

it and export the finished products around the globe while at the same

time taking advantage of the employment and wealth-producing

possibilities which can accrue to British Columbians. Because of the

government's environmental and economic policies, British Columbia may

now turn a vital, positive corner in our economic lives with increased

security for our citizens,

But we are cautious of this

project. If it proves feasible, it must be done correctly. It must be

done in an environmentally sound manner. It must be done so that it

provides benefits not only to a few but to all British Columbians. We

will not proceed if these prerequisites are not met. The government

looks forward with great optimism to this project.

MR. GABELMANN :

I will be a bit shorter than the minister was. First of all, may I say

thank you to the minister for providing us with notice of the statement

in advance. We appreciate that.

On a lighter note, I want

to say that essentially this is really an announcement of a tour to

decide whether there will be a pre-feasibility study. You might call it

a pre-pre-feasibility study. I also expect

[ Page

6037 ]

that it will be the first of perhaps a dozen or two

dozen announcements of this project, leading up to the next provincial

general election.

Having said that, we on this side of the

House have argued for many decades for diversification of the economy

in this province. We welcome a diversification which will end our

reliance on exporting raw resources in often unfinished form. If this

kind of project can lead to that kind of economy, then we welcome steps

taken in that direction.

You need to note very carefully

though, Mr. Speaker, that this is really a very preliminary

announcement, There are no sites, no studies of markets, no

identification of materials supplies, no socio-economic studies and on

and on. We're at a very preliminary stage.

Just mentioning

the words environment and sustainable development 18 times does not

necessarily make it so. People who live in this province have seen

what's happened to the Pittsburghs and the Hamiltons of the world, and

they do not want it to happen here.

We welcome the

announcement. We welcome efforts made to determine whether this kind of

project can succeed in a proper way in this province, and we look

forward to many more announcements of this project.

Ministerial Statement

VANCOUVER ISLAND GAS PIPELINE

HON. MR. DAVIS :

Mr. Speaker, I'd like to make a statement of particular interest to

those who live on Vancouver Island and on the Sunshine Coast, use

energy there and are concerned about the cleanliness of their local

environment.

In the last few days we have finalized in all

its legal detail the financial agreement with the federal government to

provide the dollar underpinning for the Vancouver Island gas pipeline.

A tripartite agreement — federal, provincial and pipeline company — document

has been signed, and it outlines all of the financial, engineering and

environmental requirements which will be imposed on the pipeline. The

financial contribution by the private sector will exceed that of the

two governments. Nevertheless, the commitments by the government are

essential to the project proceeding.

There are several

important additional requirements that must be met. The gas supply must

be contracted; it will be contracted from the B.C. Peace River

producers at market price. In other words, they won't be required in

any way to subsidize the project. Contracts must be finalized — they've been drafted and initialed —

with the major forest products companies and the pulp mills along the

route. They, again, will be paying market price or oil equivalent

prices for gas and indeed will be assisted in converting their

oil-using plants to gas.

There are environmental concerns, including those in the Coquitlam watershed,

which must be sensitively addressed. Hopefully, all of these requirements will

be met within the next month to six weeks. Meanwhile, the pipeline company will

be buying its steel. The actual bids are 10 percent below their estimates; equipment

bids are 15 percent or more below the estimates.

looks like the project is underway. To date, it certainly looks as

though the problems are surmountable. The report of the B.C. Utilities

Commission, identifying the various hurdles over which the project

still has to pass, will be released next week, and we will be

addressing those to ensure that construction starts this summer.

MS. EDWARDS :

First of all I'd like to express thanks to the minister for informing

me just before the afternoon sitting that he would be making this

statement. I have to offer the minister congratulations for having

wrung the money from the hands of the federal government.

What

I was hoping to hear when the minister talked about having achieved

that particular goal was that now the people of British Columbia would

have time to slow down and look at this project, and be able to

familiarize themselves with what really is happening, and what the

restraints and the conditions would be.

It looks as though there are some provisions, some expectations, coming out —

deficiencies that the Utilities Commission saw. I think it takes some

time for the public to be able to take a look at these, and I was

hoping that these would be made public. The public has so far not had

an adequate chance to know what was going on and make any input.

However, I am very disappointed to hear that the minister now expects

things to go ahead in a month or six weeks, which, I think, is not

adequate time to deal with the kind of environmental deficiencies that

we may have seen and the disagreements and the strength of conviction

of the people whose watershed was, has been, and perhaps still is,

threatened with damage.

I would urge the minister to ensure

that the environmental positives of this particular project be assured

and that they be seen to outweigh the negatives.

Introduction of Bills

AN ACT TO MERGE THE

BRITISH COLUMBIA COUNTY COURT AND

THE BRITISH COLUMBIA SUPREME COURT

Mr. Sihota presented a bill intituled

An Act to Merge the British Columbia County Court and the British Columbia Supreme Court.

[2:30]

MR. SIHOTA :

I am pleased to rise and present what I would consider to be

legislation which represents a fundamental change in the availability

of justice in British Columbia. It is

an act to merge the B.C. Supreme

and County Courts. The County Court has served this province well.

However, over the years, judges in the County Court have come to take

on many of the responsibilities and attributes of a Su-

[ Page 6038 ]

preme

Court judge, to the point now where there are few distinctions between

the two courts, and those that remain are often confusing and

irrational.

Mr. Speaker, in introducing this legislation,

we surpass the recommendations of the Hughes commission which, by

providing additional powers to County Court judges, served only to blur

the distinction between the two courts. Merger would result first in

greater administrative efficiency, and secondly, it would turn what

many now call the Vancouver Supreme Court into a Supreme Court for all

British Columbians, so that people in Prince George, Trail and even

Kamloops will have ongoing access to a Supreme Court.

It is

our view that this legislation will be implemented in consultation with

the bar and with the Chief justice of the Supreme Court, and it would

ensure that there be resident Supreme Court judges throughout British

Columbia.

This is a New Democrat alternative, and New

Democrats are proud of the initiative in judicial reform that this

legislation represents and would encourage the Attorney-General to

follow up on the leadership exhibited in this bill.

Bill

M206 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.

Presenting Reports

Hon.

S. Hagen presented the reports of the Ministry of Advanced Education

and Job Training for the periods of April 1, 1986 to March 31, 1987 and

April 1, 1987 to March 31, 1988.

Oral Questions

DEFICIENCIES IN LOG SCALING

MR. MILLER :

Mr. Speaker, I have a question to the Minister of Forests. The

auditor-general's report has identified serious deficiencies in check

scaling and noted that, "some regions rely almost entirely on industry

to monitor and report volume and species of timber harvested."

The Tozer-Levy report — your own internal document —

recommended six-person SWAT teams in every region of British Columbia

to combat this serious loss of revenue. Why has the minister rejected

the advice of his own internal staff?

HON. MR. PARKER :

We've created nine teams in the consideration of the management group

of the Forest Service. Nine teams will be the right distribution for

the province, and the means of dealing with the concerns of the

auditor-general, which are welcomed. As you know, in both public and

private business you engage an auditor to assess the business and how

it's proceeding — whether or not it's meeting the normally

accepted principles of operation. This particular item that's raised by

the auditor-general is one that we welcome, because it's an audit

system that we're using in the Ministry of Forests to make sure that we

are meeting our obligations under the act and that our clients are

meeting the obligations under their contracts.

MR. MILLER :

Supplementary to the Minister of Forests, Mr. Speaker. Nine teams

represent 18 people; there are 18 current vacancies. All you're doing

is filling current vacancies. Two regional managers, Mr. Levy and Mr.

Tozer, recommended 36 new full-time equivalents to deal with this

serious loss of revenue. Why have you rejected the advice of your own

ministry staff?

HON. MR. PARKER : Mr. Speaker, I believe that question has been replied to already.

MR. MILLER :

Again to the Minister of Forests, Mr. Speaker. Could the minister

advise what the magnitude of revenue loss is as a result of inadequate

policies and staffing levels in the ministry?

HON. MR. PARKER :

The comments by the auditor-general, Mr. Speaker, were that his people

think there's a high risk of incomplete or inaccurate data being

received by the ministry, and they have flagged that issue. Now whether

or not there has been has not been determined by the auditor. As far as

the ministry is concerned, our procedures are adequate and have been

serving the purpose of revenue collection in the province.

When

we brought in the policy changes at the beginning of October 1987, we

identified the fact that because we were lifting the revenues we would

have to change the system by which we were dealing with

collections — and we have been doing that — and we're about

half-way through the process of getting that whole collection system

revised and up to speed. One thing we've put into place already is the

electronic transfer of scale data; that means that there are fewer

errors in transcription, which is one of the biggest concerns we've had

in the past.

MR. MILLER : Again to the Minister of

Forests, who didn't answer the question about how much revenue we have

lost, I checked with the auditor-general; their

interpretation of a

"high risk" is "virtual certainty." That's from the auditor-general's

office. Would the minister confirm that on just two small sales last

year in the Campbell River and Sunshine Coast districts, $300,000 worth

of timber escaped billing and was only discovered through an anonymous

tipoff?

HON. MR. PARKER : It sounds to me like a

criminal act. If the member opposite would like to share that

information with us, we'll make an investigation. I otherwise take the

question as notice.

MR. MILLER : Again, the minister refuses to answer the question. Would the minister advise whether penalties have been imposed — that is, fines or removal of eligibility to bid on small business sales — as a result of the issue I just mentioned?

[ Page 6039 ]

HON. MR. PARKER :

I must insist on receiving the information that the member is speaking

to, because I do not know which timber sales, and we go by timber-sale

numbers. Each licence has its own specific number, and that is the

number that is appended to the timber.

MR. MILLER : A

new question to the Minister of Forests. It's very surprising, Mr.

Minister, that you would not be aware of a revenue loss of that

magnitude. Would the minister confirm that there is no time requirement

for scaling to be done after harvesting is completed?

HON. MR. PARKER : The scaling procedure is that the timber removed from a site is to be scaled before it's relocated to another site.

MR. MILLER :

With regard to the reconciliation of the cruise to scale, in the

Tozer-Levy report two senior members of your staff state that the

appraisal audits are superficial due to lack of sufficient staff'. Why

has the minister not acted to increase staff to protect the interests

of the Crown and the people of B.C. who own those resources?

HON. MR. PARKER :

The member is referring to an internal memo. I would imagine the

question would be most properly addressed to the individual to whom the

memo was addressed. I'll be happy to do just that. I'll take that

question as notice.

MR. MILLER : The Tozer-Levy task

force, very hastily assembled to deal with the issues raised by the

auditor-general, stated that the log squad, what they called the SWAT

teams — they wanted 36 people; you've got 18 — must have

authority under the Police Act to stop and check trucks and to seize

loads. Has the minister taken action to obtain this authority?

HON. MR. PARKER :

The Ministry of Forests can seize loads that are improperly marked for

which there has been timber theft. It has been done in the past. It's

being done now and it will be done in the future. No change.

MR. MILLER :

Ministry senior staff have made a number of recommendations. There is a

serious loss of revenue in this province. The minister can't identify

how much revenue. He can't identify why he hasn't acted.

Mr. Minister, first you go out of your way to rewrite contracts to suit forest companies....

MR. SPEAKER : Order, please. Has the member got a question?

MR. MILLER : Can the minister inform the House whether he is acting for the forest corporations or the people of this province?

MR. SPEAKER : The question is out of order.

FOREST INDUSTRY INQUIRY

MR. KEMPF :

To the same minister. Given the damning evidence of this report, has

the minister now decided to do a full inquiry, whether it be judicial

or a royal commission or through the standing select committee of this

House, into all aspects — not just scaling, but log movements, the

Vancouver log market, the waste that's being left out in the woods....

Has the minister decided to do the right thing on behalf of the people

of British Columbia with respect to their primary resource?

HON. MR. PARKER : We always attempt to do the right thing for the people of British Columbia.

MR. KEMPF :

One billion dollars still not going into the coffers of this province

from a forest industry that it should be coming from, and the minister

makes snide remarks?

MR. SPEAKER : Order, please. Has the member got a question?

MR. KEMPF :

Yes, I have a question. Is the minister going to act? Is the minister

going to call a royal commission or a judicial inquiry into what's

going on in the forest industry of British Columbia?

HON. MR. PARKER :

I can tell you that we're considering that. Whether or not it will come

down is a matter of future policy, and we will deal with it at that

time.

MR. KEMPF : One final question to the Premier.

Has the Premier decided, given the evidence in an auditor-general's

report, to intervene on behalf of his minister and make sure that the

revenue that should be coming — and that should have been coming for five decades — from the forest resources of this province into the coffers...? Is he going to intervene and make sure that this happens?

HON. MR. VANDER ZALM : I don't know whether I heard the question.

MR. KEMPF : Open your ears.

SOME HON. MEMBERS : Oh, oh!

HON. MR. VANDER ZALM :

I have every confidence in every member of cabinet, and they'll carry

forth their responsibilities in a proper manner. I'm sure the matter

will be dealt with according to what's best for the citizens of the

province.

SALE OF WESTWOOD LAND

MR. ROSE :

I'd like to direct a question or two to the Minister of Government

Management Services. This concerns the Westwood lands. Last January the

opposition called on the government not to repeat the folly of the Expo

lands sales, that is, flogging a valuable parcel of real estate to one

single developer. In-

[ Page 6040 ]

stead,

we urged the government to consider leasing and selling it to many

local B.C. developers. Can the minister confirm that negotiations are

currently underway with a single developer for the sale of the Westwood

plateau?

HON. MR. MICHAEL : I thank the member for

the question. The sale of the Westwood properties is well known. It has

been well advertised and advertised internationally. Proposals have

been submitted, and the member is well aware of that. I understand some

70 packages were picked up, including one from the NDP caucus, so he's

certainly aware of the number of proposals that have been picked up.

Yes, 18 firm proposals have been presented to the corporation, and I

can advise the member that the 18 proposals have been reviewed and

evaluated. There has been a shortlist established of some four, five or

six firms, and, yes, negotiations are transpiring.

MR. ROSE :

A supplementary. Can the minister confirm that the government is

prepared to accept a lump-sum cash payment of some $63 million for the

Westwood land from a single developer?

HON. MR. MICHAEL :

I don't know where the member got that figure from, nor do I know where

the newspapers got it. That figure has certainly never been released by

the government. The final negotiations.... In fact, I'm not sure the

first meeting has yet been held; I haven't chocked with my staff in the

last couple of days. But it's strictly speculative, and where that

figure came from this minister has no idea.

[2:45]

I can assure you, Mr. Speaker and the members of this House, that

the members on this side of the assembly will go down on record as

being in favour of private ownership of land in the province of British

Columbia.

MR. ROSE : While the minister is checking his facts, I wonder if he could also confirm that at least one other developer — Triple Five Development — offered the government over six times the price' based on a joint venture, with the government retaining ownership of the land.

HON. MR. MICHAEL :

Mr. Speaker, any negotiations transpiring at present are strictly

confidential. They are being dealt with by a committee established by

the corporation, and I cannot confirm or deny any figures that the

member or developers wish to pick out of the air.

AUDITOR-GENERAL'S REPORT

ON PRIVATIZATION PROCESS

MR. BRUCE :

A question to the same minister, in respect of the auditor-general's

report. The auditor-general has written that the government's

privatization process adequately considers value for money when the

government follows a public bidding process. However, the process

favours privatization through employees, without public bids. The

auditor-

general goes on to say that this

preferred process is inadequate to provide the information needed to

evaluate the value-for-money consequences of privatization decisions.

Could the minister advise the House whether he agrees with this verdict

and what impact the auditor-general's comments will likely have on

further privatization initiatives?

HON. MR. MICHAEL :

The auditor-general's report has just been received. Indeed, he is

certainly critical of the process whereby direct negotiations were

conducted with employees of various ministries. We in government make

no apology for the procedure that we followed. We are very proud of the

privatization initiatives negotiated to date; we are particularly proud

of the negotiations completed with employee groups. They've been

tremendously successful across the length and breadth of the province.

Regarding

the tail end of the question, Mr. Speaker, that is future action and

future policy. The committee will be analyzing the report and making

recommendations to cabinet.

Presenting Reports

HON. MR. RICHMOND :

Mr. Speaker, I have the honour to present the report of the Special

Committee of Selection, and I move that it be taken as read and

received.

Motion approved.

HON. MR. RICHMOND : By leave, I move that the rules be suspended to permit the moving of a motion to adopt the report.

Leave granted.

HON. MR. RICHMOND :

I move that the report be adopted, and in doing so I would like to

thank the members of the selection committee on both sides of the House

and all members in the House who agreed to allow their names to stand

for the various committees.

Motion approved.

Orders of the Day

The House in Committee of Supply; Mr. Pelton in the chair.

ESTIMATES: MINISTRY OF

GOVERNMENT MANAGEMENT SERVICES

On vote 31: minister's office, $259,265 (continued).

MR. PERRY :

Mr. Chairman, I wish to continue the debate from where we left off

yesterday, but perhaps in a more congenial spirit. I'm delighted to see

a smile on the face of the Premier today. I noticed one yesterday and

was looking forward to complimenting

[ Page 6041 ]

him on it, but we ran out of time. It's a very nice sight to see.

I've

considered very carefully Mr. Chairman's remarks yesterday, and I'd

like to thank the Attorney-General (Hon. S.D. Smith) before he leaves

the House. I'd like to express my very sincere appreciation of the

generous compliments that he made to me yesterday. Having reread them,

I think that some of those who know me a little better, including my

family, might think that he went a bit far in his flattering comments

about me. They may have been rather extreme, but I appreciate them

nonetheless.

Mr. Chairman, I think that there has been a

serious misapprehension on the government side as to some of my

intentions, and I would like to take the opportunity before the House

to correct the misapprehension. Reading the Hansard

Blues from yesterday, I've come to the conclusion that members opposite

have taken personal offence and interpreted remarks that I made during

a political campaign as an accusation of personal corruption on their

part. If so, I sincerely regret that they've interpreted my comments

that way, and I wish to assure them that I do not regard them as

personally corrupt. I mean that very sincerely.

I look

forward to working with all members in the House. I said before and I

repeat: I appreciate the welcome I've received from most members in the

House, and I look forward to serving the public with members from both

sides of the House - particularly the government, which ultimately does

the business of the people in British Columbia.

I have made

remarks that have been strongly critical of government policy. I do not

regret those remarks, and I will continue to make some of them in my

role as a member of the opposition and a representative of the people

of Vancouver-Point Grey. But I would like members of the government,

including members of the cabinet, to be clear that I do not regard them

as personally corrupt.

I would like to continue the debate

on the estimates of the Minister of Government Management Services with

one additional question, and I'll try to be very brief. One other issue

which concerns my constituents is the matter of the Jericho lands.

Having discussed the issue of the Jericho lands with staff and the

principal of the Jericho Hill School, my understanding is that there

are legitimate reasons presently before the government for the school

to be moved to a site in Burnaby. If the school is moved for legitimate

reasons and with the consent of the school, as I understand is the

government's policy, this raises the question of what will become of

those lands presently held under public tenure in a very sensitive site

in the city of Vancouver. I would like the minister to reassure the

House that the lands will not be subject to disposition through sale,

that they will remain under public ownership and control, and that any

development of the Jericho lands in the city of Vancouver will proceed

only with the consent of, and after full consultation with, the

community that surrounds those lands.

That's the only additional question that I had for the minister. I appreciate the opportunity to make these remarks.

HON. MR. MICHAEL :

I thank the member for his interest in those properties. It is indeed a

lovely site. I can assure the member that very little thought has been

put into the future of those lands: whether they will or will not be

disposed of. It's a future policy decision. We have not made any

recommendations. No serious discussions have been held by the

corporation. There have been no discussions held in committee. But I do

thank the member for his interest, and I assure him that there will be

a great deal of thought and discussion by the government on that

subject.

MR. CASHORE : The question I would like to

pursue now has to do with the Expo land deal documents that were tabled

in the House a couple of days ago. I'm sure you can appreciate, Mr.

Minister, that it's going to take a long time to wade through that

material and really get a sense of everything in its completeness. I do

need some assistance, though.

My understanding is that the

agreement for the purchase of the Expo lands was made on April 25,

1988, and that the agreement received some wide publicity at that time.

Would the minister confirm that?

HON. MR. MICHAEL :

That is a question directed to me of which.... I was not the minister

at the time. I was not in charge of the B.C. Enterprise Corporation,

and was not involved in the negotiation process. An agreement was

signed, and I'm sure the member can read the date on the top right-hand

corner. I don't have the agreement in front of me either. The date is

certainly available.

I recollect a very large press

conference being arranged around the time the deal was signed. I

recollect a very large display of the vision of the development of the

property. I recollect that one of your members, the first member for

Vancouver East (Mr. Williams), was seen on television attending that.

I'm sure he would be familiar with the precise date. I also recollect

very complimentary remarks being made by the first member for Vancouver

East. If it's important to the member to have the precise date of the

press conference and the media event, perhaps I could have that traced

by my staff, or searched through the library, and delivered to the

member — if it is really important.

MR. CASHORE :

Thank you for that answer, Mr. Minister. We will take it as a given

that it was April 25, unless other information is forthcoming. I take

it then that there was an agreement dated approximately May 11 — a little over two weeks later — which

is referred to as the soils agreement. Would the minister explain to

the House just what the relationship is between the soils agreement and

the purchase agreement?

[3:00]

[ Page 6042 ]

HON. MR. MICHAEL :

The front page of the

summary of material on the agreement indicates a

$1 million cash deposit on execution of purchase agreement dated April

25, 1988. Then it refers to

section B, where it talks about $49 million

on closing May 11.

On technical questions regarding soil

agreements or anything to do with soil agreements, I must bow to my

colleague the Minister of Environment (Hon. Mr. Strachan). The Ministry

of Environment has been given responsibility by cabinet to oversee the

soil agreement; and indeed, the minister was involved quite deeply in a

consultative-advisory manner during the negotiation process — as

it was recognized and had been recognized for many, many years. It was

well known that that soil was contaminated. As I have said on previous

occasions, our corporation and the government are proud of the way in

which this has been handled. We take the responsibility. We have

accepted the responsibility, as is done in the vast majority of

relationships between the vendor and the buyer. In this case, the

government has followed what you might say is past precedent in

accepting that responsibility, and rightfully so. We will see that that

soil is delivered to the buyer in a clean, environmentally acceptable

manner. Standards will be set by the Ministry of Environment, and I'm

sure those standards will be very acceptable to all bodies, including

the city of Vancouver.

MR. CASHORE : You have

referred to this being done on the basis of past precedents. I find it

unusual that an agreement would be put forward in two phases of two

separate agreements spanning two weeks. I think we need some

reassurance with regard to what exactly was going on there. After the

original agreement was signed, did the purchaser then come to realize

there was this problem with contamination, and at that point it

behooved the minister who was responsible at the time to make an

additional arrangement, which would then explain the signing at a later

date? I'd like to hear the minister's comment on that. If it were

determined that the Crown was liable because it had knowledge of the

contaminants, regardless of the agreements signed, that raises an

interesting question in terms of the stewardship of the public purse.

While

I'm asking that question, you might give us your thoughts on why the

Crown didn't see fit to go after, for instance, Canadian Pacific and

Marathon Realty, who were the original owners of the land. The fact is

that the province received land that was presumably contaminated prior

to the province receiving the land.

If the same principle in law applies —

that when Concord Pacific purchased it, it was, ergo, the

responsibility of the people of British Columbia, who at that time held

title to the land, to cover that responsibility for the polluted

land — then does not that same "ergo" apply in the relationship

between the people of British Columbia and the previous owner of the

land? This is a landowner, as my colleague has pointed out, that is a

corporation that on a worldwide basis has certainly done extremely well

and been treated in a generous way by the people of Canada throughout

its history.

I would like this minister to take his time

and explain very carefully to this House why those two agreements were

on those two different dates. He says "past precedents." I would think

past precedents for most effective agreements of this nature would

indicate an agreement all in one package signed on one day. I don't

really think it's past precedent to have a supplemental agreement

approximately two weeks or so later. There may be an explanation for

this. I would encourage this minister to come forward with an

explanation on behalf of his government. It's something that the people

of British Columbia would like to have explained, and so far I don't

think it has been explained.

Two questions. Why the lapse

in time between those two agreements? Did that therefore mean that the

government had not fully apprised itself of the situation it was

dealing with? Maybe it was dealing with people much more sophisticated

than they were. If that is the case, then why would the same principles

that applied in the agreement between Concord Pacific and the people of

British Columbia not apply in the agreement between the people of

British Columbia and the previous owners?

HON. MR. MICHAEL :

First of all, I take some offence to that remark that the Concord

people were more sophisticated than our people. I don't know why the

opposition has to continually make-reference to things along those

lines. I think they're stooping to a low. I truly take offence on

behalf of my staff. I take offence on behalf of the professional

negotiators that acted on behalf of government. The member opposite,

from Nanaimo, makes remarks that we got taken on the deal. Well, Mr.

Chairman, I said it yesterday and I'll repeat it today: those lands

were advertised worldwide. If there is one sure way, in the free market

system, of finding out precisely what the optimum value of a property

such as that is, it is to put the facts out into the open marketplace,

as we did internationally. We did that, and we looked at all of the

proposals. Our negotiators analyzed those proposals, and sat down and

negotiated the final agreement with the leading contender.

Interjection.

HON. MR. MICHAEL :

I have a lot of difficulty with why we continue to get these snide

remarks. Perhaps the first member for Nanaimo (Mr. Lovick) would like

to stand up and give us a full report on the Commonwealth Holding

Society and some of the goings-on there back in 1976.

The

thing that I would like to say to the member is that perhaps there were

different dates on which the officials signed. Perhaps the agreements

had been reached on the contents, and all of the documents weren't

signed on precisely the same day. But to make a suggestion that this

was suddenly discovered, after the hundreds and hundreds of hours that

those

[ Page 6043 ]

two parties had been negotiating, I find somewhat inconceivable.

The

question of liability. I suppose if we chose, we could perhaps attempt

to trace back the person or corporation, the body responsible for the

pollution of the land. There are several members in this House who

indeed are aware of who the culprit was; I know that the member for

Coquitlam-Moody (Mr. Rose) would be aware. It was B.C. Electric. They

were the ones that ran the gas plant there for many years. Many

members, part of this assembly, have worked in that plant; I've heard

different ones comment on having worked on this site — the smell, etc.

The

body that has now taken over B.C. Electric, we're all aware, is B.C.

Hydro, and I suppose there could be an argument put up that we should

be asking them to pay for the cost of cleaning up the soil. But, Mr.

Chairman, that would be playing ring-around-the-rosy; it would be like

taking money out of one pocket and putting it in another, as we indeed

do on the sales and transfers of money and the disposition of surpluses

at year-end among Crown corporations and government. Indeed, that

happens quite regularly on the transferring of land.

The

bottom line, looking at the background.... The property was purchased,

and we felt at the time that we were paying a good dollar for it. It

was in the range of $8 to $10 a foot. The selling price, as reported

yesterday, was $45 a square foot. If we hadn't accepted the liability

on the soils remediation, the price certainly would have been

discounted accordingly. So it would have been a matter of getting in

probably three more experts in soil contamination identification,

perhaps spending another lump of money in for having thorough analysis

and costs identified, and over the bargaining table with the advice of

all the consulting firms — the drillers, technicians, consultants and specialists —

on just what it would cost to pick up the tab. Had that figure been

identified as being in the vicinity of, for example, $18 million, then

I think it's quite predictable what the purchaser's response would have

been to that clearly identified figure. He would have simply taken $18

million off the selling price of $320 million.

Always remember, Mr. Member, when we are talking about the selling price as being $320 million, we're certainly aware — as the member is aware — that

much of this is delayed payment, and that there was no interest, as

agreed to at the bargaining table, built into the amount owing.

When

speaking of the $320 million selling price, one must also take into

consideration the provincial participation regarding density. We are

still reasonably convinced that the density will be finally agreed upon

well in excess of the 12 million square feet that was identified as the

base figure in the negotiated agreement with Concord. Indeed, Mr.

Member, we are still predicting a figure somewhere in the range of $150

million, and it could be as high as $190 million. Taking the middle

figure of $170 million and adding that to the $320 million, we could

conceivably end up with a final sale price of some $490 million not

$320 million. That is in the future. Negotiations are currently going

on, as the member is aware, with the city of Vancouver — planners, engineers and negotiators. I am sure that not a week goes by — probably not a day — when meetings, discussions, telephone calls or letters aren't being exchanged.

[3:15]

1 am certainly pleased that the government of the day decided to do

what they did. I think it was a wise decision. A simple example is the

amount the developer has put into that project already in the way of

consulting fees, legal fees, and thousands of hours of meetings and

negotiations. Concord must have spent millions of dollars to this date

getting the planning process underway, and there is still no sign of an

early agreement with the city of Vancouver.

In the

meantime, we have had at least the $50 million in the bank, and I am

sure that the Minister of Finance (Hon. Mr. Couvelier) has invested

that wisely. It has probably already grown in excess of $55 million,

and that is with extremely little time and effort of the B.C.

Enterprise Corporation or employees of the provincial government.

MR. CASHORE :

Mr. Minister, I don't really believe that you have answered my question

about why the same rules do not apply when a contract is being

developed between the people of British Columbia and Concord Pacific as

would apply in a deal between the people of British Columbia and the

corporation from which the land was originally purchased. One can only

assume that since there was that time-gap after the writing of the main

agreement, the soils agreement must have, in some way, come along out

of left field. There just has not been a legitimate answer forthcoming

with regard to this.

My understanding is that the purchase agreement was on an as-is, where-is basis —

with one exception. That one exception was in paragraph 503(a), where

it pertains to this soils agreement. It's very interesting that it

would be called an as-is, where-is agreement, except in this situation

that has resulted in a Pandora's box for the people of British

Columbia, who have responsibility for an incredible environmental

problem that the people of Vancouver are really concerned about. It

appears that there are very serious concerns about the type of process

that might be used. Hence, the consultant's report goes through a wide

range of possibilities, all the way up to one that costs $480 million.

Hopefully you'll find something that doesn't cost nearly that amount,

but it still means that the people of British Columbia are being

saddled with it.

Not only that, why on earth did the

province agree to pay all the cleanup costs, including an additional 3

percent for Concord to manage the cleanup? Surely, Mr. Minister, when

you speak in a very proud way about what you say is a wonderful

agreement, couldn't you even accept the fact that the purchaser should

have some responsibility in this, if indeed you are not able to claim

responsibility of the person from whom you purchased the property?

[ Page 6044 ]

HON. MR. MICHAEL :

I don't know how one goes about answering ridiculous statements. I did

my very best yesterday to explain this in detail, but the member keeps

coming back to this $480 million cleanup cost. It's so ridiculous it

really doesn't deserve comment. It is ridiculous and irresponsible to

suggest that the figure would be anywhere near that, because it will be

a very small fraction of that.

Interjection.

HON. MR. MICHAEL :

The member says I didn't answer his question. I thought I had answered

his question. The previous owner of the property was the CPR. My

understanding is that the CPR obtained the property from B.C. Electric.

suppose what the member would like to see happen is for the provincial

government and the B.C. Enterprise Corporation to start on a long legal

treadmill of suing the CPR and spending taxpayers' money, to the tune

of millions of dollars. I can tell you that the cost of lawyers

handling a case such as that would run in the range of $195 an hour,

and I can imagine the fun the legal profession would have with an

attempted suit along those lines. There'd be a real field day over in

the big city, while the working stiffs are up in the interior, out in

the woods cutting down the trees, priming the pump, and the farmers are

out in the fields trying to get by with a portion of the income,

pouring tax dollars into the province, and we are going out and taking

on the CPR in a lawsuit for full indemnity of that soil.

Then, if that suit was successful, I suppose we could expect a duplication

of the entire process. We would then have the CPR suing B.C. Hydro, and B.C.

Hydro would have to hire an equally large battery of high-priced lawyers to

fight the case put forward by the CPR. And so we would go; the clock would be

running. I'm sure they would have a field day for at least six or eight

years on that one.

Who

would pay? I suggest to the member that the people of the province

would pay, because they would run up millions of dollars in legal fees

to end up suing themselves. The bottom line would be that B.C. Hydro

would end up paying the full cost of the cleanup of the soil, whatever

that figure might be -$16 million, $18 million, perhaps $20 million -

and in the meantime the legal profession would have a real field day

for six or eight years.

No, Mr. Member, this government did

the responsible thing. We're concerned with the soil on those lands,

and we're concerned about the environment. We accepted the

responsibility and we signed an agreement with Concord assuring them

that that soil would be cleaned up and paid for and would meet the high

standards set out by the Minister of Environment.

MR. CASHORE :

Mr. Chairman, this is incredible. The minister goes along with all of

his charity, saying: "Why should this group have to pay? Why should CPR

have to pay? Why should this polluter have to pay?" But then he says:

"The people of BritishColumbia have to pay." If he's not saying that,

it's tantamount to saying that, because that's the kind of deal they

effected. He hasn't been able to explain why they worked out a deal

signed on April 25, which seemed to have forgotten about all of this.

talks about this government being very concerned about the condition of

the environment, etc. Presumably it had that knowledge. Why did it not

avoid the embarrassment you're going through right now, not only in

this House but throughout the province — why didn't your predecessor avoid it? —

by having that worked into the agreement signed on April 25, if you

were so sure at that time that you were coming forward with an

agreement that was protecting the environment of that area on behalf of

the people of British Columbia?

I submit to you, Mr.

Minister, that we're dealing here with something incredibly incompetent

that was going on at that time. 'You haven't been able to say whether

or not your government tried to effect a deal without reference to the

contamination - the deal signed on April 25. You haven't said that and

you aren't going to say it, because you are going to try to evade it

because it's so embarrassing to your government.

We have

this situation that is really very difficult. Yet you, Mr.

Minister, don't seem to understand that the same principles that apply

in an agreement between your government and Concord should also apply

between your government and the people from whom you purchased the

property. When you're going on about how this is ever going to work

out, I'd suggest that you get in touch with the people who administer

Superfund in the United States. They are far more up to speed in terms

of protecting the public interest than this government is. I would

suggest that if you were to get in touch with Superfund and find out

how it works, you would see that there is indeed a workable solution to

this type of dilemma, one that's been working and protecting taxpayers

in other jurisdictions.

One of the questions I asked you that you didn't answer — I'd like to get your answer on the record — is

how you justify including a 3 percent fee to Concord for managing the

cleanup. Surely the purchaser of this has some responsibility with

regard to this part of the situation. Couldn't you even negotiate that

if they were going to be managing it, they would at least see that as

their fair share? Can't you people negotiate anything?

HON. MR. MICHAEL : Mr. Chairman, I ask leave to make an introduction.

Leave granted.

HON. MR. MICHAEL :

If I could interrupt our debate for just a moment, I'd like to welcome

a group to our gallery today on behalf of the members for

Vancouver-Little Mountain (Mrs. McCarthy and Mr. Mowat). They are

students from the bridge program from Sir Charles Tupper Secondary

School in the great constituency of Vancouver-Little Mountain.

[ Page 6045 ]

They are here today with their teacher, Mr. Campbell. Would the House please make them welcome.

[3:30]

In response to the member on the 3 percent commission, clearly a

decision made across the negotiating table.... I'm not sure whether the

member has ever sat at a negotiating table, but I can assure him....

He's nodding his head that he has. I was about to say that if he hasn't

sat at a negotiating table, then there are many members over there who

have sat at negotiating tables — in fact, I have sat with one of them —

who could explain the process of negotiation. Negotiating an agreement

such as this, although much more elaborate and more involved, with

tremendous hours involved, is not much different in its overall format

than negotiating a collective agreement, whether it be with teachers,

professors or the BCGEU. There is a negotiation process, in which

people sit down over a number of days, weeks or months — certainly months in this instance —

and identify problems. They draft a framework for the discussions at

the table, and one by one, through the process, items fall off the

table and are agreed upon. They are written down and put into legal

language, and eventually an agreement is either made or not made.

this particular instance, it became a done deal. Involved in that

agreement was a provision that a 3 percent commission would be paid to

Concord by the corporation to oversee and manage the cleanup of the

site. It was considered by both parties at the table, or I'm sure the

document would have never been signed. On the day of the signing, the

parties felt it to be fair, equitable and part of the overall pluses

and minuses built into that massive document, which covered some five

volumes.

MR. ROSE : Mr. Speaker, the member for

Maillardville-Coquitlam (Mr. Cashore), who just left the House,

apologizes for leaving in the midst of the minister's reply, and thanks

him for his reply. He says he'll be looking forward to reading it in Hansard . He said: "It didn't sound very good, but I'm sure it will read well."

wonder if I might turn to something else. I've had enough of Concord

Pacific right now, and as the person in charge of a critic....

MR. BRUCE : You're all alone.

MR. ROSE :

This usually happens when I get up to speak, but I'm not unduly

depressed by it. Those who are here will be listening, I think — at

least I hope so.

What I'd like to do is go onto something

else and lob the minister a few marshmallows to do with the very

interesting golden handshake given to one David Poole. We haven't heard

much about this lately, and I think this would be an excellent

opportunity to discuss it, since we don't appear to be going anywhere

anyway. I wonder if the minister, since he's really in charge of

severance and pensions, could detail his and the superannuation

commissioner's role in the process. What do you do? What is the nature

of the minister's role now that he has taken over this interesting

grab-bag of departments, commissions, etc.?

HON. MR. MICHAEL :

The member brings up a subject that.... He is certainly well aware, as

a result of a great deal of public discussion, that the government has

appointed former Chief Justice Nemetz to conduct a study on the entire

matter of pensions and severance policies of government. The facts are

well known. The study that has been commissioned in the hands of former

Chief justice is well underway, and I'm sure the member would not want

me to prejudge the results of that study in any way.

certainly look forward to receiving the report. We have asked him, as

the member is aware, to examine the current policy of this government.

We have asked him to look at other jurisdictions, and I'm sure he will.

I'm sure the appointed person will make inquiries of other

provinces — probably of all the provinces. I'm not sure how many,

but I would think he would inquire of all provinces. I'm sure he will

travel and have personal discussions with some of the main provinces,

and sit down with them to do a thorough analysis, a detailed review of

how other jurisdictions, particularly governments, handle cases of

retirement, severance pay and pension benefits. I hope the member will

find that our past policies have not been much different from those of

other provinces. I hope he will, but he may not, and if we are out of

step, either too high or too low, then I would fully expect

recommendations to be forthcoming for changes to be brought to my

attention so that I will have the opportunity to discuss those

recommendations with my senior staff and take recommendations on to the

executive council. But until such time as that review has been

completed and I have received the report, I am unable in any way to

prejudge what the former Chief Justice might say or indeed make any

comment to the member regarding things that might be contained in the

report.

MR. ROSE : It looks as if we're going to have

a magnificent future, because Mr. Justice Nemetz is a well-respected

jurist and known to many of us for his exemplary service on behalf of

the province over the years. But that doesn't explain the past. I want

to know what happened.

I would just like to remind the minister of the chronology of this affair — this unfortunate affair, in a lot of people's minds.

August 4, 1988, Mr. Poole's departure from the Premier's office was

announced for September 30. The Premier asserted that the decision was

Poole's alone and said: "I deeply regret that he has made it." Mr.

Poole took with him a severance package of some $97,000 and his pension

rights with an amortized cost of well in excess of $100,000.

September 4 we learned that Mr. Poole had left early in the wake of the

Knight Street Pub report, identifying specific interference by Poole in

favour of friends and insiders of the government, namely Mr. Charles

Giordano. I know his case is before the

[ Page 6046 ]

courts, so I won't comment on it, other than to state the fact that he was a former campaign manager of the Premier.

September 14 the Minister of Government Management Services and the

Minister of Social Services and Housing (Hon. Mr. Richmond) signed a

cabinet order, and I have it here, giving recognition to Mr. Poole's

stint of five years and two months with the Alberta and Saskatchewan

college system. The order is interesting in that it requires no client

cash contribution from Mr. Poole such as average employees pay, and it

is not signed by the superannuation commissioner, John Cook.

One

of the early questions I would have is: why not? I've got the cabinet

order of September 2 about a former employee who had to cough up

$52,000 to cover his period with the government. Another one here was

asked to cough up $30,000. Interestingly enough, even a member of this

House was asked to cough up some $500 to cover her worth. A person from

Hong Kong was also part of that package.

Interestingly

enough, this Mr. Poole was given this expensive golden handshake signed

by the Minister of Government Management Services and the presiding

member of the executive council, Mr. Richmond, who is the Minister of

Social Services and Housing. But in stark contrast to all the other

orders in-council, this one was not signed either by the legal officer

in the case — I can't read his name, but it looks like Mowat,

superannuation commissioner and the statutory authority.... I can't

read this either. It looks like McIlargy, but I don't think it is.

Adamson on one. Anyway, they're all signed, except this one. Virtually

every one made contributions, except one Marie Taylor, who got credit

somehow, for nothing, for years she worked for Simpson-Sears in

Ontario. You will recall that Mrs. Taylor was a former head of the

Utilities Commission.

So that's an interesting question:

why did he get special treatment? Why was there no signature either by

the legal officer or the superannuation commissioner? I suspect that

the superannuation commissioner wouldn't do it; he is a very cautious

man and didn't want to be part of this.

Anyway, going on

with the chronology, on November 16, when confronted with the details

of Poole's severance, the Premier said: "I guess they have a pretty

neat deal in government." He also said he had no idea what the

severance provisions for Poole were, and the Minister of Finance said

his only part was to give strict instructions that Poole was to be

treated no differently from anybody else. I bet he wasn't treated any

differently than anybody else! Anybody who will believe that will

believe in the tooth fairy. He took a big bite out of us on this one.

November 18, 1988, the amortized cost of Poole's pension settlement is

estimated to be $112,500, excluding any provision for indexing. I'm not

opposed to indexing. I think it's the only way we can save our

pensions, and that we don't systematically rob people who are being

retired. But that's another debate.

November 21, 1988:

Social Credit research director Marlyn Brown circulates a memo to

Socred MLA constituency offices defending the Poole pension settlement

as fair. Mr. Brown wrote: "Of course, Mr. Poole's resignation was

agreed upon by all parties, but it goes without saying that his

decision was prompted by outside pressures and through no fault of his

own...." The former Minister of Economic Development expresses

unhappiness with Poole's severance, and well she might.

The

Minister of Government Management Services says: "Official severance

policy is to be fair and reasonable in light of all circumstances."

This is a report in the Province on November 22, 1988. "Former deputy

labour minister Graham Leslie announced that the Premier was personally

in charge of approving his severance package" — meaning Leslie's —

"and that the Premier hates the idea of giving severance pay to

departing civil servants." I don't know whether Mr. Poole was civil or

uncivil, but he certainly was departing.

On November 23,

Judge Nathan Nemetz was appointed to look into the severance policy.

The Leader of the Opposition asks if Mr. Poole was fired for cause, as

it seems to imply in the press release. How could he walk away with

close to $100,000?

Secondly, I want to know who approved

that sweetheart deal. Auditor-general George Morfitt is reported to

have been investigating how the severance was calculated. On November

29, 1988, Harcourt asks the Premier for suspension of

section 34(4) of

the Pension (Public Service) Act which provided authority for

recognizing Mr. Poole's out-of-province service.

In a

letter, Mr. Harcourt asked the Minister of Government Management

Services a number of questions. I will go through them very rapidly

because I know some people are very tired of hearing about this

arrangement with Mr. Poole:

"The Leader of the Opposition requests you provide answers

to the following questions:

"What

Crown and employee contributions, if any, were made which are not

included in the 11 OICs passed under

section 34(4) since September '87?

In the case of David Poole, does the absence of any payment whatsoever

mean no payments were made?

"If no payments were made, then how will the new public pension commitments to Mr. Poole be financed?

"Under

what guidelines of your department is pensionable service as far back

as 1950 and as far away as Hong Kong and Scotland being recognized by

order-in-council?

"What assurance can you provide that David Poole or any

other public servant receiving pensionable service under

section 34(4) is not

double-dipping?

"What assurance can you provide that

section 3 (4) orders

are not being used as a form of compensation for departing employees?

"Finally, why was this particular order granting pensionable service not signed by the Superannuation Commission?"

[3:45]

Those are some pretty important questions. That letter has never been answered.

[ Page 6047 ]

December 1, more questions were asked by the Leader of the Opposition

in this House. On December 8, Mr. Harcourt, the Leader of the

Opposition, asked Nemetz to investigate Poole's pension package. The

auditor general, George Morfitt, suspends his investigation — and this is a crucial point — to allow Justice Nemetz to address the issue of Poole's departure.

December 13, 1988, Nemetz confirms that the focus of his inquiry is

future policy, not Poole's severance. That's at odds with what the

minister just told us. Either he doesn't know or he has accidentally

misled this House. I'd like him to consider that. Why would he say that

Mr. Nemetz is going to look into Mr. Poole's severance, while Mr.

Nemetz, the respected judge, denies this?

December 22:

Nemetz declines to investigate Poole package, saying his mandate is

future policy. The minister across the way replies to Harcourt's

November 29 letter, saying: "Further comments would be inappropriate

until Mr. Nemetz has had the opportunity to conduct his inquiry." Those

are awfully difficult contradictions for me, in my rather limited

intelligence and experience, to understand. The minister says: "Nemetz

is looking into Poole and I can't talk about that until that happens."

Then Nemetz, the judge, says: "I'm not. I'm not looking into what

happened, but what should happen in future."

December 28:

the Leader of the Opposition calls for the Premier to stop payment of

any further payouts to Poole. This was in response to reports that

Poole had received $51,000 from the government in 1989.

I'd

like to ask further: the policy of severance pay was drafted in 1983.

It seeks graduated pension benefits and severance benefits depending on

the level of employee, the income, how long he'd been with the

government, etc. A senior management position would entitle the

loftiest one to five months, according to this policy. Was the policy

changed in August '87? I'd like to know what the policy is now. Is

there a policy, number one? Was the policy changed in August 1987? What

is the new policy? When did it change and who changed it? I think if we

could start with that, we might be able to shed a little light on this

particular issue.

HON. MR. MICHAEL : I certainly

apologize if I misled this House, if I in any way suggested that

Nemetz's report was going to have any effect on anything that has

already been done. I apologize if I left that impression, because that

certainly was not my intent.

The former Chief Justice is

certainly going to be looking at the government policy that was in

place and making recommendations for any changes needed in the future.

Drawing from that, Mr. Member, I would have to say that the policy in

place at the time—- or parts of it, or the perimeters within which it fell — certainly led to the recommendations made and eventually signed by two members of the executive council.

The

question of why did we sign.... It was an order-in-council. It was

brought to the cabinet chamber. The cabinet in its wisdom made a

decision on approving the recommendation as written out. The decision

was made by the executive council. It has the authority and the right

to make such decisions. The responsibility rests on their shoulders

and, indeed, the two people required to sign, as the member has named

them, signed the OIC on behalf of the executive council.

The

question about why it didn't perhaps go a different route.... I would

suggest to the member that the person we're talking about in this case

is the most senior civil servant in government. There is no one any

higher in the civil servant category. Not only was he a deputy

minister, but he was the senior deputy minister, reporting directly to

the Premier.

The reason for Mr. Poole's departure and the

technicalities of it are clearly outside my jurisdiction, and I don't

think they are subjects for the House to be discussing today. But

certainly the most senior civil servant of government had a parting of

the ways, and government in its wisdom looked at the alternatives, at

policy, at past policy and would have looked at what might have come

out of many months, or perhaps years, of battles in our court system.

can tell the member from personal experience that it is indeed a very

lengthy, costly process for both parties to embark on. It is a very

rare occurrence in government in situations of involuntary departure

that civil, fair-minded people are not able to negotiate a settlement

without turning to the courts. In my experience in this ministry, I

can't think of any single case — I'm not saying there hasn't been one; I can't think of one in my experience as a minister — where

we haven't been able to settle severance disputes away from the courts.

I can say and I have said in the past that I am familiar with other

settlements that have been made that have been for as much or more than

what was given in this particular case.

The base-rate cost

of living. Looking, as an example, at the IWA base rate in January 1,

1976, $6.14 an hour, and looking at that base rate today in 1989, and

doing an examination of what is fair and equitable on a percentage

basis in relationship to those base rates I can tell the member

opposite that there were much more generous awards given in the area of

pensions....

MR. ROSE : For severance?

HON. MR. MICHAEL :

For severance. ...back in 1976. Maybe it has to do with the first name;

I'm not sure. Maybe the secret to this whole thing is having David as a

first name. But there was one David Cass-Beggs, who received a

tremendously generous pension, signed by the government in 1975; it was

an order-in-council piloted through the executive council by the

minister of the day, who sits in this House representing Vancouver

East. There are others as well as David Cass-Beggs who we could put on

the record. But it was extremely overly generous, in looking at what

was fair in '76 compared to what you would relate as being fair today.

[ Page 6048 ]

Yes,

we try to be fair and equitable when making decisions and judgments on

matters such as this. It's a sensitive matter. We don't like going to

the courts and hiring these high-priced lawyers to fight the battles on

our behalf, which forces the other party to do the same. We know and

the member knows that past experience has proven that you can burn more

money away through legal battles than it would cost to settle the

dispute amicably.

[Mr. Rogers in the chair.]

far as the details of the package are concerned, there have been a lot

of figures bandied around the corridors. The member knows full well the

position of the government and my position, which is that matters such

as these are dealt with on a confidential basis. Indeed, many

agreements that we have with senior people include severance

arrangements, and they include confidentiality clauses that are built

into the agreement. So to break or violate any of those things would be

most improper.

I'm certain, Mr. Chairman, that the member

is well aware that this is not unusual. It is the precise, exact policy

that is followed by all public bodies. The practice is followed by

school boards. When dealing with personnel matters, the doors are

closed; the meetings are held in camera. The same policy is practised

by all councils. Indeed, the record will show that the former mayor of

the city of Vancouver, the current Leader of the Opposition, would

close the door and excuse the press when deciding on matters of

severance and personnel matters. He need not make any apology for that,

because that is the practice wherever you go. It's the practice at the

municipal level, the school board level, the regional level, the

provincial level; it's the practice at the federal level. Indeed,

matters such as this in the private sector, by and large, are done

confidentially. And that is for the respect of the employee, Mr.

Member. We don't wish to drag his name through the meat-grinder and

advertise to the world.

[4:00]

It's a decision, and it's a policy decision not only by this

provincial government but by other provincial governments. It's my

understanding that the former government in Saskatchewan and the one

that just about got wiped off the map in Manitoba a short time ago used

to practise the same policy as this government. So we make no apologies

for that, Mr. Member.

MR. ROSE : I notice that

there was a rather weak defence by the minister of the practices. I

understand the confidentiality. But orders-in-council are not

confidential; they're public documents, and I was relating to them. I

asked why the superannuation commissioner didn't sign this one, when

all the others were signed by both him and a legal officer? Why is this

the only one sent directly to the Lieutenant-Governor?

HON. MR. MICHAEL : Perhaps when I answered that, the member was having

a personal discussion with one of his other colleagues across the way, because

I distinctly answered the question very early on.

The

answer to the question is that Mr. Poole held a particular senior

position. Not only was he a deputy; he was the senior deputy, the

Premier's deputy and the chief senior civil servant in the province.

The member certainly isn't suggesting that the situation should be that

senior deputy reporting to the Premier should have the privilege or the

authority, prior to departure, to instruct his subordinates to work out

the arrangements and sign a document such as this.

It would

seem logical to me, and I will be extremely interested in receiving the

Nemetz report. I'm looking forward to the recommendations, I'm looking

forward to seeing what goes on in other jurisdictions. I want to know

whether we are right or wrong in our current policy. I want to be

comfortable with current policy. I don't want us to be extraordinarily

high, and I don't want us to be extraordinarily low. I like to look at

what the averages are, what's here and what's there. Let's look at

what's fair and equitable.

That's not much different from

looking at negotiation processes or all kinds of other things. We

continually ask ourselves how they do it in other jurisdictions, or

what they are paying over there, or what's the policy over here. We do

that continually. The explanation is as given and as I said earlier,

when I believe you were having a conversation with one of your

colleagues.

MR. ROSE : I thank the minister for his

reply, and I'll attempt to thread through the steps of the obfuscator's

waltz. I don't understand what he's saying. Every one of these other

orders was signed by the superannuation commissioner, Mr. Cook, and

many by Mr. Adamson. I want to know if Mr. Poole was fired.

HON. MR. MICHAEL :

My response to that question many months ago was that we had a parting

of the ways. The answer to the question put to me by the press, not too

long ago, was that we do not pay severance to anyone.... As a matter of

fact, if you check the record, you'll find that I put out a release

some time ago stating that we do not pay pensions to anyone who leaves

voluntarily. That was stated many months ago, and I think that answers

the member's question.

MR. ROSE : I take it then that

the minister is telling us that, due to the fact that Mr. Poole

received a fairly substantial golden handshake, he was indeed

fired — by definition.

HON. MR. MICHAEL : Mr.

Chairman, I will say it one more time. My understanding of the

situation is that Mr. Poole did not depart from government voluntarily.

MR. ROSE :

If he didn't depart from government voluntarily and you don't give

severance pay to those who are fired, then will you please tell the

House what justification there was for the government to

[ Page 6049 ]

give this estimable gentleman this enormous golden handshake and a kiss on both cheeks?

HON. MR. MICHAEL :

Mr. Chairman, I did not say that Mr. Poole wasn't fired. What I did

say, and I'll say it one more time, was that he did not leave the

services of government voluntarily.

MR. ROSE :

Honestly, I can't.... The question is: did he fall or was he pushed?

That's all we need to know. Government employees who leave voluntarily

do not get severance pay. Right. Government employees who are fired do

not get severance pay. Then how does Mr. Poole get severance pay?

HON. MR. MICHAEL :

I haven't said, Mr. Chairman, that Mr. Poole was fired. I didn't say

that. I did say that he didn't leave voluntarily. And I have not said

that people who are fired don't get severance pay. I have never said

that. I'm not saying that under certain arrangements people who are

fired.... I have not said that under certain circumstances they do not

receive severance pay.

MR. CHAIRMAN : The debate is very interesting, but Hansard

is going to try and record this, and when the members and the minister

speak across without being recognized, it's very difficult for Hansard

to record it. At some time in the future this particular debate may be

very interesting, for people who aren't in the chamber today, to read

in Hansard . I'd ask the opposition House Leader to wait till he's recognized and then proceed. I recognize you now, sir.

MR. ROSE :

Well, I'm looking at 34(4) in the policy, and the policy is certainly

quite clear on this subject. I virtually give up on this line of

questioning, which I suppose....

SOME HON. MEMBERS : No, don't give up.

MR. ROSE : You want some more?

I'd like to know if 34(4) is still the policy. On page 4 of this 34(4) — this was the pre-Poole policy manual for people — you have several levels: senior management, middle management, lower management, special staff.

Interjection.

MR. ROSE : No, cess-Poole.

Senior

management, more than $50,000 a year: I think that would define Mr.

Poole. Length of service: one month to a year gets five months; two

weeks per year after eight years, if he's 41 to 55; he still only gets

five months. This guy got something like $175,000, if you consider

indexing and all the other parts of it. That's why I wonder. I'm not

interested in comparison to Cass-Beggs. This was a contractual thing,

to bring this man in to head B.C. Hydro, and his contract included the

provision that if the government was defeated he would have to leave.

He left a very senior position. He didn't come from being an instructor

at a junior college or a community college;

he came as an

acknowledged energy and hydro expert. Besides, he didn't leave in

disgrace. He left with an admirable record, and one that I think we

could all emulate. So if his severance pay might be similar, the

conditions were entirely different, and that doesn't excuse this at all.

would like to know: if Mr. Poole was not fired, then why was he granted

such a tremendous amount of severance pay, when your policy obviously

does not cover this? Why wouldn't the public have a right to suspect

that he was given this generous amount because he knew where all the

bodies were buried? Maybe we bought more than just his loyalty; we may

have bought his silence.

MR. LOVICK : Omerta.

MR. ROSE : Pardon?

MR. LOVICK : Omerta. It's the Mafia's's code of silence.

MR. ROSE : Oh, I see. I thought you were in pain for a moment there.

I am quite interested in the minister's attempt to answer this question.

HON. MR. MICHAEL :

There are a lot of reasons why people separate, why there's a parting

of the ways. The member is trying to use the hard word "fired." Why

doesn't he talk about a mutually agreeable departure or a negotiated

parting of the ways? There are lots of things taken into consideration.

The member knows that, and so does the member for Nanaimo.

I'm

sure that if we were to examine the college in Nanaimo, we would find

arrangements that were made without a lot of hullabaloo, where two

people sat down and said: "Look, it's not working out, I think we'd

better have a parting of the ways; I think it's time. We'll seek some

advice without spending buckets of money on legal fees" — as indeed we sought and obtained advice. We consulted with senior staff in government, and we received advice.

Yes,

I feel that the authority in this particular case, as I've stated

before, rested with the executive council because of the stature of

this individual. I think that if the member would just reflect on other

cases, other situations.... Common sense, reason, good judgment,

fairness and equity, alternatives — all of those types of things

have to be taken into consideration. I can state emphatically that

there were no political considerations involved in the negotiations

with Mr. Poole on my behalf or on behalf of any of my colleagues that

I'm familiar with.

[4:15]

MR. ROSE : With due deference to Hansard , and their desire to get everything right so people can read these words 40 years from now — I'm quite sure I won't be able to —

can the minister explain, as the guardian of the public purse, the

staunch defender of the public purse that he poses to be this

afternoon, why, in order-in-council 1781, Mr. James Joseph —

[ Page 6050 ]

I've deliberately left his surname out —

65, had to make up his public service superannuation fund contribution

in the amount of $52 000 to cover that period, and the B.C. Ferry

Corporation was required to make a contribution to this fund of about

$61,000? How do you explain that?

Compare that to another

estimable gentleman from Hong Kong. He was employed for four years and

three months in the period January 1, 1965... in Hong Kong with the

Hong Kong social welfare department: "...that this be recognized as

pensionable service," and the Crown be required to make up some $30,000

and this man nothing. I can name others who were asked to contribute

$45,000, but other people got away with nothing.

Here's Marie Taylor, for instance —

a five-year period with Sears Canada in Toronto: "...that this be

recognized as pensionable service." Why? We don't even pay our

constituency secretaries or assistants for pensionable service, on

either side of the House. Yet here it comes if you work for Sears. Mrs.

Taylor paid nothing, and the Crown paid $45,000 for her pensionable

service, She was a member of the Utilities Commission.

don't know how this works. Poole comes in and he pays nothing. He gets

the golden handshake. There's no record of anything he paid. Who paid

it? Where's the money coming from? It's not coming out of the

superannuation fund; I don't think Mr. Cook would be that loose. He's

the guardian of the public purse, and I have reason to believe that.

How do you explain that Marie Taylor, the daughter of a one-time Socred

MLA, and David Poole, the principal secretary to the Premier, got

pension rights and paid nothing? And the minister says there were no

political considerations! Again, I find it difficult to reconcile those

statements.

The whole thing is full of contradictions. It's

a virtual tortuous maze of contradictions. I don't see how anybody can

have confidence in what the minister.... He's trying very hard. I

wouldn't say he's not trying to the best of his ability to provide

reasonable answers, but you can't provide reasonable answers to

unreasonable propositions, and you have the difficult job of attempting

to defend the indefensible. So tell us about Taylor, tell us about

Poole and why these other poor guys had to pay up to $61 000. Here's

one who was nailed for $20,000; another one, $30,000; a member of this

House as an MLA had to pay $500 — no political consideration there. It's just not credible, and quite frankly, I think it's highly aromatic.

HON. MR. MICHAEL : As in a lot of cases such as this, I'm sure that

a lot of good will come about from the discussion, and a lot of positive things

will come about as a result of the Nemetz report. As I said earlier, I'm

truly looking forward to receiving that, and perhaps we can get at some of these

things that the member is talking about: the Hong Kong service and department

stores and things like that. I can assure the member that the former Chief Justice

has access to all these OICs that the member has referred to. He certainly has

complete, free access to all those documents, and indeed to lots of other government

documents. We have been working and will be continuing to work very closely

with the Chief Justice.

Yes,

Mr. Chairman, the money was paid out of government funds. That's the

responsibility of the executive council. As someone once said: "The

buck stops here." It has the responsibility to make decisions and to

manage, and that was the decision made — somewhat different from

the $80,000 paid to the first member for Vancouver East (Mr. Williams).

That was paid from bingo funds, elderly ladies playing bingo in Nanaimo

making their contribution to the Commonwealth Holding Society. And they

pay out $80,000 to the former minister, $2,000 a month. I'm still not

sure whether he received interest on that $80,000. I learned as

recently as late yesterday that the $80,000 actually didn't stay in the

hands of the Commonwealth Holding Society. Do you know that the money

was put in the hands of a law firm and then into a trust account? I bet

it was an interest-bearing account. A brand-new revelation. I just

heard that late last night. I'm sure we know who got the interest. Paid

for from bingo funds and bake sales, a lot of people putting a lot of

work and effort into that, $80,000 to do research and plans on a

$500,000 piece of property. My goodness!

Getting back to

the question at hand: yes, decisions are made, and unfortunately, they

are not all equal. That's life. I suppose what the members opposite

would suggest is that we have a single figure, and everybody gets it

whether they work for six months, 20 months or 20 years. But I can tell

you that situations of this nature are dealt with on a case-by-case

basis. Yes, we have a policy. Yes, we have a framework that we expect

discussions and negotiations to fall within.

But judgment

calls are made. In listening to the best advice we had available on

this case, we decided on the OIC as presented. As the member is aware,

we are embarking on a thorough review of our policy, through the former

Chief Justice, and of policies across this country, to see how we stack

up. I'm sure the Chief Justice will be delivering that report to us

very shortly, and we will be reading it over closely and examining his

recommendations clause by clause. We will be going over it — not only myself but my senior staff —

and reviewing the former Chief Justice's advice, taking the report to

my colleagues in cabinet, and either at the time the report is

delivered to my colleagues or shortly thereafter, we will be taking

recommendations, if needed, for future government policy to my

colleagues.

MR. ROSE : Some witty member — cynically, I think, and certainly humorously —

recently observed that if Mr. Poole had left in half the time, he might

have been worth twice as much. However, I wasn't that closely

acquainted with his work. As Senator Everett Dirksen once said: "A

billion here and a billion there, and pretty soon it runs into real

money." If we're going to look after the public purse and have the

people confident that we're treating everybody fairly, and it is indeed

not political, then the record of

[ Page 6051 ]

the past few months has not been erased. But it certainly has to be corrected.

MR. LOVICK :

I think the time has come to change the tone somewhat, if I might put

it that way. May I begin first though, Mr. Chairman, by asking the

House leave to make an introduction?

Leave granted.

MR. LOVICK :

Those of you who have spent any amount of time in this chamber for the

last two years will have noticed that there is one individual who

probably spends more time in this chamber than any other single

person — in the galleries, at least. He is probably one of the

most well-informed, knowledgeable individuals in the entire province of

British Columbia.

He seems especially well informed because

he always responds favourably to all of my utterances. Therefore I take

great delight in welcoming and would ask you to please join me in

welcoming Mr. Bill Kirkness.

Mr. Chairman, this is an

opportunity to participate in the debate on the Government Management

Services portfolio. To begin that, I have to say that I have some

difficulty when I hear the minister constantly admonishing others for

impugning his integrity in some way, shape or form. Then instantly he

turns to a regular batch of ammunition he carries with him that I think

demonstrates the sense of fair play of a ferret.

The

individual constantly wants to refer to members who aren't present in

this chamber and are not able to defend themselves and wants to talk

about issues that, quite frankly, go much beyond anything to do with

the business of this chamber. I am referring to the references to my

former seatmate, who is currently the Member of Parliament for Nanaimo

Cowichan. I am referring to the numerous references to the Nanaimo

Commonwealth Holding Society and to bingo games. I am referring to this

$80,000 payoff.

I hope we could set to rest that whole

rather silly debate by just reminding the minister of one elementary

point: he surely — if anybody — ought to recognize that there

is a distinction between private moneys and public moneys. We are in

this chamber to talk about the expenditure of public moneys. That is

our purpose and our responsibility.

That minister, whenever

the heat becomes a little intense and he is bereft of ammunition to

fight back decides to change the subject and to engage in those kinds

of arguments. If the minister is sincere when h tells us that he

believes in the code of conduct for this chamber, and that we ought to

acquit ourselves honourably and fairly, then for heaven's sake let him

once and for all resolve that he will no longer make use of those — fairly called, I think — cheap shots.

They

don't belong in this chamber; they have n relevance whatsoever to what

we're discussing, Mr. Minister. You know it, I know it and members of

this chamber know it, So let's forget that. Please grant u that, Mr.

Minister.

Services. I want to begin with a very straightforward question. I have

listened now for two days to the discussions in the chamber. I have

listened to the minister's efforts to answer questions and to explain

things, but I do not yet have — and I am prepared to acknowledge it may be my failing — any clear sense of just what this new ministry is and does.

[4:30]

I know that it has responsibility for a number of Crown corporations

and for commissions. I know that it presides over the privatization

and — I am trying to remember the other name of that organization —

communications division. I know that it has a number of those

responsibilities, but I am wondering about the thing itself called

Government Management Services.

I want to refer to the

first item in the vote description under "Administration and Support

Services." As I say, this is merely to elicit some information; I have

no other agenda. I quote: "This subvote provides for administration and

support to the ministry including executive and general administration,

financial and personnel management, and information systems." Fine;

straightforward, characteristic of any ministry vote. But then it says:

"Provision is also made for some services for the Legislature and

office of the Premier." Further, it goes on to say: "This subvote also

provides for cabinet committee expenses and travel expenses within

Canada for members of the executive council, ministers of state,

parliamentary secretaries and related staff."

It sounds

pretty clear to me that this Government Management Services entity

moves into a number of other jurisdictions as well. I wonder if I might

then start by asking the minister to please explain to me just what the

divisions are. Is some part of the regional development operation being

paid for by your ministry votes?

MR. CHAIRMAN : Just before we proceed to the minister, I might comment

on a little bit of night reading for the members. We seem to be getting slightly

off the subject of what is appropriate to discuss in Committee of Supply, and

I'm quoting from — the nineteenth edition of Sir Erskine May's Parliamentary

Practice, page 741. If members have an opportunity to read that at their leisure,

perhaps we'll have the debate a little more closely confined to the actual

terms of reference of what we're supposed to debate, which is the administrative

responsibility of the ministry.

MR. LOVICK : Mr. Chairman, could I just point out the irony of your timing.

I think I'm probably the person closest to having been directly in order

for some time, and I would just like to clarify that your utterance was not

directed to my comments.

MR. CHAIRMAN : As a matter of fact, Mr. Member you are quite correct.

Your debate was in order, and I was hoping other members might wish to emulate

it as their model in this committee. I believe it's the first time in some

time that we've heard debate

[ Page 6052 ]

that's

in order. I would ask members of the executive council and other

members of the House to consider that. Page 741 is the reference for

you.

HON. MR. MICHAEL : If the member would read my

opening remarks in the Blues when I started on Monday at around 2:40

p.m., I think he'll find in there a pretty good review of the kind of

areas within my jurisdiction. He'll find that we have within our

ministry a lot of Crown corporations — many more than show on the

surface, I might add. We have all kinds of mini and small Crown

corporations that you don't hear about very often.

I might

just add as a footnote that I'm doing my very best behind the scenes to

wrap up a lot of these old Crown corps that have been on the books and

the public accounts for years and years. Some hold little or no assets;

some hold random amounts. We're trying to consolidate and transfer and

clean up the backlog to lower the cost of overhead and legal fees and

registrations, and all of these kinds of things. Give us another year,

and I think you'll be pleased with the cleaning up that happens as a

result of the efforts of this ministry.

I want the member

to know that I took cognizance of what he said regarding the Nanaimo

Commonwealth Holding Society. I'll give you my pledge that I will never

mention the word in the chamber again, with the understanding that the

member will give that same lecture — and I know I'll have his assurance —

to his very close seatmate from Esquimalt-Port Renfrew. Perhaps we

could clear up a few things from the past if that lecture was given to

him.

MR. LOVICK : You're too subtle. I don't follow you.

HON. MR. MICHAEL : Perhaps it would be better spoken off the record, Mr. Member, because he sure knows what I'm talking about.

In our ministry we do set policy, we do make recommendations on such things as per diem, meal allowances — breakfast, lunch, dinner —

maximum vouchers permissible for such things as hotel expenses. In

fact, we aggressively seek out areas were we get the best deal. That

includes traveling as well. Yes, we not only do the staffing for our

own ministry directly, we also do the staffing as required for the

Premier's office. Needless to say, other ministries look after their

own. Certainly we assist the Premier's office, and we service anything

to do with computers. Other ministries have a free and open choice,

when it comes to computers, whether they wish to contract those

services to the B.C. Systems Corporation or whether they choose to go

to the private sector or both and have a competition for delivery.

my view, we do have an area that deserves closer management when it

comes to anything to do with computers in government. As I said during

my estimates, we are currently spending some $170 million a year in

processing computer work in all the ministries of government. The

figure has been growing at a very rapid rate certainly for the last two

years — some 20 percent a year — and we anticipate that figure to continue to grow at quite a rapid pace.

What

we have done in this ministry is recommend to cabinet, Treasury Board

and to the Minister of Finance and Corporate Relations that we be given

the authority to set up an office of information technology and

security. We have already appointed the director, and we are already

halfway through the staffing of that new office. There is lots to be

done.

There is tremendous responsibility on that new

director to review, to communicate, to seek agreement, to streamline,

to integrate and to make recommendations on the cost-effective delivery

of that incredibly important service that all government ministries

require and, more importantly, to also oversee and assure that we have

the very best security of information. As the member is aware, there

are certainly many areas of government — certainly much more so in some ministries than others — where security is critical.

We're

looking forward to the development of that division within my ministry.

By and large, suffice it to say that the basic description of my

ministry would be one that delivers service to other ministries of

government. There are a couple of exceptions to the rule that were

placed in my ministry in a way of convenience, I suppose, but also a

bit of a tie-in to service to ministries.

Certainly, those

two areas would be the B.C. Pavilion Corporation, which is very much in

the promotion, selling and development of conventions and bookings for

the B.C. Place Stadium, the trade and convention centre, the Whistler

Golf Course, the Whistler Conference Centre and the Enterprise

Corporation, and doing a very good job at that.

They are a

teeny bit of a misfit, although not wholly because they do naturally

serve government as well. They are into the marketplace internationally

selling British Columbia, selling Vancouver, selling Whistler to the

world literally, and doing a tremendous job in filling up the B.C.

Place Stadium, the trade and convention centre and other facilities.

The

other exception, I suppose, you would wonder about and want to think

about its fitting into the ministry would be the PNE. Suffice it to say

we have that responsibility. I don't attend as many of the board

meetings as I would like to, but I try to keep in very close touch with

the Pacific National Exhibition.

I can tell the member that

as far as the boards of the B.C. Pavilion Corporation, the B.C.

Buildings Corporation and the B.C. Systems Corporation are concerned,

it's rare I miss a meeting. I attend pretty well all of them. I keep in

close touch. I find by doing that, we are able to do a lot of

cross-indexing: taking ideas from one area and putting it in another.

have a tremendous number of cost centres, as the member is aware, if he

reads the overall description. We have something like 13 clearly

identifiable cost centres and reams of sub cost centres within those 13.

Back in early February, we saw an opportunity to spend three days up in Parksville at a senior management retreat — a workshop — that we organized. We

[ Page 6053 ]

invited

representatives of every single cost centre -the top chief executive

officers of the Crown, the deputies and the assistant deputies. Indeed,

we went over the entire plans, the ideas, how we can work together, the

things we can produce, where we can work more closely together

cost-effectively with heavy emphasis on service. I think it was a

productive session, and I can assure you that the staff enjoyed it. I

certainly enjoyed being a part of it.

We have developed

many programs. The member heard of the program I spoke of in the

opening of my estimates. That is just one example. I could outline

about 28 others. One program that was really put in high gear with a

real heavy emphasis deals with the question of recycling, environment

and the investigation into the Styrofoam cups. The policy since that

point in time has been that the British Columbia government through the

Purchasing Commission will no longer buy any Styrofoam cups that

contain the slightest percentage of CFCs.

That was an

initiative that came about through the Purchasing Commission. The

Purchasing Commission has a tremendous responsibility and a wide

spectrum of opportunities in being able to get into the entrepreneurial

area to identify potential markets to create jobs and economic

development. We're doing those things.

Also, the member is aware of the recycled paper. We gave some samples. I know the member had a look at them.

Interjection.

HON. MR. MICHAEL : No harm in dreaming, Mr. Member. Without dreams, where is one, after all.

[4:45]

The other area where I'm sure we're going to get cooperation from

the length and breadth of government and in Crown corporations is the

tremendous opportunities of recycling lubricating oil. I think we are

looking at dollars into the six figures, tremendous savings to

government. We don't intend to spend months and months studying,

analyzing, consulting and what have you. We're doing it mainly inhouse.

I can assure the member you won't have to wait very long. I would think

in two more weeks you are going to see a positive move by this ministry

embarking on programs in that area. I think British Columbians will be

proud of the results from the work being currently undertaken.

MR. LOVICK : I thank the minister for his detailed and lengthy answer.

It's not entirely the question I asked, but that's all right because

I think it's a step forward. What I wanted to do before I pursue any of

those things in detail is to just make sure I understood correctly one of the

points the minister made.

[Mr. Pelton in the chair.]

answer to my question, he said fairly early in his response that his

office does the staffing for the Premier's office. I would like him to

clarify that because I notice we have vote 4 coming before this

Legislature

in which the salaries and benefits of the Premier's office amount to

some $1,184,000. What I'd like to do then is to simply make sure I

understand what the minister was alluding to when he said, "...do some

staffing for the Premier." Let's start there.

HON. MR. MICHAEL :

I'm very pleased that the member brought that point up. It's incredibly

important that the record be clear and the jurisdiction and

responsibility be defined. What we do is simply offer our staffs

services. If the Premier's office is in need of a clerk-steno 3 or 4,

someone that is not already working in the office, and they're looking

for some names and recommendations — perhaps even a short-listing arrangement where we will give two or three potential candidates — it's that kind of a service that we provide to the Premier's office.

MR. LOVICK :

I must say that I'm rather surprised by the answer. That was not what I

had anticipated, so if I might, I'll just pursue. That sounds like an

office pool or something that is permanently maintained within

government management services. If we're talking about providing a

clerk-steno to the Premier's office as the need arises, is it the case

then that you have a reservoir or a stable of talent that you just make

use of as the need arises? If so, how large? How many people are out

there given you have to respond to the exigencies of the moment and

deal with pressing demands from the Premier's office and perhaps others?

HON. MR. MICHAEL :

It's more of a consultative arrangement; a service assisting them with

the posting process, with "red tape." It's that type of a service that

we would indeed provide to any ministry. As you are aware, other

ministries have personnel divisions and are much bigger in size and

have that experience and expertise within their ministry. It's one of

consultation and advice and assistance, but we would offer that service

to other ministries as well.

MR. LOVICK : Is it the

case that there is a complement of full-time employees permanently

assigned to Government Management Services who are called upon on

occasion to satisfy needs as they arise for other ministries, including

the office of the Premier? Is that the case, and are those people

subject to all the normal benefits of the Government Employees' Union

contract, or is this a temporary workforce, a special workforce? How

does that function?

HON. MR. MICHAEL : The answer to the member's first question is no.

MR. LOVICK : And the second question?

HON. MR. MICHAEL :

I understand the second question to be: do the full-time staff of the

Minister of Government Management Services and/or the Premier's office

receive and are they entitled to a wide range of employee benefits? If

that's the question, the answer is yes.

[ Page 6054 ]

MR. LOVICK :

I'm not about to quibble, Mr. Chairman, but it wasn't precisely what

the question was. However, I think we'll probably address it as we go.

want to come back to my first question, in answer to which I was given

a rather lengthy dissertation on everything you always wanted to know

May

I say, Mr. Minister, that I perhaps missed your introduction of your

staff persons, and I would therefore just like to say that I am pleased

to see Peter Clark, the ADM, and Allan Brent, your deputy, here. I have

met one of them before, and I have always appreciated their

cooperation. I'm delighted they are here and thank them for their time.

Back

to my question, if I might. Again, I am referring simply to the vote

description, and I guess it's going to be about the third sentence. It

says: "Provision is also made for some services for the Legislature and

office of the Premier." You've given me some indication of that. Your

example, curiously enough, was clerk-steno. I think you probably mean

some other things, but that was your example. Could you give me some

idea of roughly what percentage of your budget is devoted to providing

services for the Legislature and for the office of the Premier? In

other words, how much, in addition to the votes for the offices of the

Speaker and the Premier, is in fact subsumed in your ministry?

HON. MR. MICHAEL :

The dollar amount would be so small and insignificant it would be

difficult to measure, because it's simply a matter of asking for a

service or asking for some information and that service or information

being given. I can assure the member that probably several hundred

times more time is taken up answering queries from MLAs — a small number of MLAs — than would be spent on the Premier's office. It's a very small amount, hard to measure, Mr. Member.

The

only other area where we would be giving a service to the Premier's

office that would have some identifiable dollar value would perhaps be

in the area of computer services, but personnel wise it is extremely

small.

MR. LOVICK : Same vote description, next

sentence; a more important one, I think: "This subvote also provides

for cabinet committee expenses and travel expenses within Canada for

members of the executive council...." That's not the whole sentence,

but let's stop it there. Why is it that we have to have a special

budget item for those functions rather than those functions being taken

care of under the votes for the particular ministries?

HON. MR. MICHAEL :

For travel of all cabinet ministers in all areas we have a budgeted

figure of $650,000. It's one of convenience: all the expenses are

channelled through my ministry. Final approval, authorization for

payment, is the responsibility of my staff; that's where the form ends

up.

We were talking about systems support for the Legislature, and that figure, my staff advise me, is $1.5 million.

HON. MR. STRACHAN :

Just to add to this, because it's an intriguing question, the member

and the committee should be aware that cabinet committees have been

doing an awful lot of work in this past administration, an awful lot of

travelling. Social Policy is one; ELUC is another; CCRD, of course, is

spending a lot of time. For example, speaking as chairman of the ELUC

committee, to have ELUC travel, which is about eight ministries taken

out of my portfolio, would not be appropriate. So it is therefore an

appropriate and also a wise decision to have all the travel of cabinet

committees covered under one minister's vote, as opposed to piecing it

off to the various cabinet ministers that make up cabinet committees.

MR. LOVICK :

I thank the minister for that answer, Mr. Chairman. I take it, then,

that the real answer to this question is that this particular

configuration of the ministry is a manifestation of the government's

reorganization. This is a new efficiency We are led to believe that

this is in fact a better and more efficient way of managing things. Do

I detect that that is the argument? All right, I'll accept that for the

moment.

How about the reference to the ministers of state? The ministers of state came into existence, you recall — and you remember there was considerable controversy —

with huge budgets that we all wondered what were for. Now I am

discovering in this particular separate vote, above, beyond and in

addition to the ministry of state budgets, which seem to be mostly

earmarked for travel purposes, that we suddenly have this particular

description. Anybody care to comment? Either will do.

HON. MR. MICHAEL :

Mr. Chairman, I must say how much I'm enjoying this thrilling

experience of getting into these areas that I'm sure are of great

interest to all members of the assembly here.

The

explanation, Mr. Chairman, is that every ministry will naturally have a

budget covering expenses, per diem travel and what have you, for all

employees within those ministries. It has been explained that decision

policy, control procedures.... We have decided that we will have a

central figure of $650,000 for all cabinet ministers set aside in

budget, administered and controlled — I put a quote on that "controlled" — within policy framework contained within this ministry.

involve ourselves quite a bit in ministerial travel. We certainly have

the responsibility regarding the vehicles. That's part of the Ministry

of Government Management Services. We also have the responsibility for

the air services division. As the Minister of Environment remarked — and I thank the minister for his input —

some cabinet ministers, some cabinet committees, have been doing a lot

of travelling. I know that the committee on which I served, the social

services committee, feels that it's

[ Page 6055 ]

important that we get out in the field and look firsthand at the situations going on in various corners of the province.

[5:00]

AN HON. MEMBER : Bringing government to the people.

HON. MR. MICHAEL : Bringing government to the people.

congratulate the chairman of that committee, the first member for

Kamloops, the Minister of Social Services and Housing (Hon. Mr.

Richmond), for heading up this Cabinet Committee on Social Policy. I

congratulate him for his foresight, for his enthusiasm in wanting to

take government to the people, and for getting out to the wide variety

of areas that we travel in this province. Not too long ago we spent a

full day in the city of Vernon. We visited all types of facilities out

there. That trip, by and large, was organized by the minister and his

staff, but the utilization, whenever possible — travel arrangements —

are made through Government Management Services air flights division,

to make sure that we have a plane available, so that we can facilitate

as economically as possible getting the people to the site and back

without losing too much time.

We also visited the North

Shore. We had a great trip over there. We toured some hospitals, met

with various councils, went through a school and attended a very

interesting tour of a learning institution, the job training centre. We

had a tour of one class, I recollect very clearly. We talked to a lot

talk to the people out in the field: seniors' homes, those types of

things.

Yes, it's not just that particular committee that

travels, as the Minister for the Environment (Hon. Mr. Strachan)

commented. There are others getting out in the field. The Cabinet

Committee on Regional Development certainly does a lot of travelling.

You read it in the papers continually. As a matter of fact, there's a

trip coming up later this week. A trip to the great city of Prince

George, I believe, is next on the list.

Policy, frameworks,

guidelines, per diem, motel, travel, getting out and looking at what

efficiencies are available and what's fair for per diems or meal

allowances — all these types of things fall under the jurisdiction

of the Ministry of Government Management Services. Of course, the

decisions on travel by cabinet ministers — whether they do or don't travel — are made by the respective ministers.

MR. LOVICK :

Mr. Chairman, I think we're actually beginning to zero in. We're

actually beginning to get a clearer sense of just what this new

configuration is all about. I'm intrigued though. I see that the

minister is getting a little bored by all of this, thus that rather

interesting observation he made at the beginning of his answer to me

that these were obviously thrilling areas and that everybody would be

listening avidly to find out what the answers were.

Mr.

Minister, that effort at sarcasm really doesn't speak well of you or of

your ministry. Surely this government ought to be proud of its

reorganization initiatives. Here is your opportunity to demonstrate

that this whole system is making sense. I'm a bit surprised to discover

that you're almost embarrassed because I am posing very direct,

specific questions about what you actually do over there. I'm a bit

surprised that you would respond to that in a very thinly veiled

hostile way. It seems passing strange to me that that would occur, Mr.

Chairman.

I think I can understand why it happens. Contrary

to what the minister has been suggesting for the last two and a half

days about the new efficiencies that have been achieved and the

wonderful things made possible because of Government Management

Services' activities, the reality is probably something rather

different. The reality is that in the name of government

reorganization, we've managed to demoralize a significant number of

public servants in this province. We've also managed to destabilize the

efficient operation of government in this province for a considerable

period. In fact, it's a standing joke. When you pick up your trusty

government services directory and start zipping th