1988 Legislative Session: 2nd Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MAY 27, 1988

Morning Sitting

[ Page

4687 ]

CONTENTS

Routine Proceedings

Private Members' Statements

Pub plebiscites. Ms. A. Hagen –– 4687

Hon. L. Hanson

Social studies resource package. Mr. Ree –– 4688

Mr. Lovick

Losing touch: 30 years of Social Credit. Mr. Sihota –– 4690

Hon. Mr. Strachan

The value of part-time farmers, Mr. Peterson –– 4692

Mr. Stupich

Petroleum and Natural Gas Amendment Act, 1988 (Bill 30). Committee stage.

(Hon. Mr. Davis) –– 4694

Mr. Clark

Committee of Supply: Ministry of Transportation and Highways estimates.

(Hon. Mr. Rogers)

On vote 67: minister's office –– 4697

Mr. Lovick

Mr. R. Fraser

Mr. Sihota

The House met at 10:02 a.m.

[Mr. Pelton in the chair.]

Prayers.

MR. BARNES :

Mr. Speaker, I wonder if the House would permit me a second or two to

make an announcement with respect to the late Harry Jerome, who will be

honoured tomorrow at Hallelujah Point in Stanley Park. There's going to

be an unveiling of a statue which has just been completed as a result

of the Harry Jerome Commemorative Society. I believe, as a matter of

fact, the Minister of Transportation (Hon. Mr. Rogers) will be there to

speak tomorrow as well as myself.

I just wanted the House

to know that this is a very special occasion, and Harry is going to be

recognized as the athlete of the century at 11:30 tomorrow morning, May

28. I hope that everyone will join me in saluting Harry and maybe

toasting him as well for his great achievements. We've discussed him

many times over the years in this House. Tomorrow morning, turn up if

you can. It should be a very good day. A lot of friends, dignitaries,

etc. will be there.

HON. MR. REID : We also would

like to pay special recognition to the day which is being commemorated

tomorrow. The Sports Hall of Fame on Wednesday evening paid a special

tribute to Harry Jerome as a very strong proponent of the sporting

community and well recognized internationally for his achievements.

British Columbia is very proud of his accomplishments, and the

recognition tomorrow will be endorsed by this government.

Private Members' Statements

PUB PLEBISCITES

MS. A. HAGEN : Mr. Speaker, it's nice to see you in the chair this morning.

Over

the past month, the licensing of neighbourhood pubs and marine pubs has

become a very important topic of public discussion around the policies

relating to those operations and the regulations thereto. In that

respect, those discussions fit very strongly into a whole year of

discussion about liquor policy and regulation, which now lie in the

purview of the Ministry of Labour and Consumer Services, which now has

responsibility for all aspects of liquor licensing, liquor distribution

and also education, treatment and rehabilitation in respect to liquor.

Today in this statement I want to do a very brief reprise of some of the events

and to urge the action which we on this side of the House think it's very

important for the minister to undertake in respect to his responsibilities.

I want to say first of all that I think the minister is in a very favourable

position in this regard because, through his own initiatives and the initiatives

of government, he has excellent policy review and processes in place. I want

to commend the government for that work, which provides a very solid base for

policy development — something we don't see in all ministries, I might add;

the Health ministry is one. The minister has good groundwork from which to develop

policies and regulations that will provide trust and fairness in that particular

marketplace.

There

are three issues I want to highlight in my comments. First of all,

there is the matter of neighbourhood pub applications and the

plebiscite or referendum process. That process is mandatory for the

approval of a pub licence, and it requires a 60 percent approval rate

from those voting in that plebiscite. In fact, the record for those

plebiscites is that almost half of them fail — four in ten don't

receive that requisite approval from the neighbourhoods. I quote that

statistic because it tells us how important that process is.

The

Knight Street pub in Vancouver has very prominently figured in the news

recently. because in the public's mind. the referendum process is

flawed. That particular perception was brought to the attention of this

House early this month, and the minister was urged on a number of

occasions to investigate that process, which originally he declined to

do. On May 17, Vancouver city council made it clear that it had lost

confidence in the government's ability to conduct an independent

plebiscite on neighbourhood pubs and asked for action and in fact

imposed its own indefinite moratorium on pub licences pending the

adoption of new plebiscite guidelines being developed by the UBCM. At

this time the council will conduct its own plebiscites for three

pending applications under review.

The minister has moved

to review, and I understand the report on that review is likely to be

tabled perhaps as early as today. With the tabling of that review. the

minister has an opportunity to restore the faith of that community in

the process. I can't prejudge what the report will reveal, but when the

results are made known. I believe the minister will need to ensure that

the affected neighbourhood in Vancouver is fairly treated and that. if

the report indicates that the process of plebiscite was flawed and that

there had been irregularities, redress should include the calling of

another plebiscite if those improper procedures are the outcome of his

investigation.

I have urged the minister in this House that

plebiscites should be conducted at arm's length, that they should be

conducted by bona fide firms who are accountable to the ministry — with

the costs, however. borne by the applicants — and that the guidelines

for those plebiscites should be consistent and published. The minister

has, in fact, called together a committee of municipal and ministry

people to deal with working relationships between municipalities and

his ministry on that licensing, and I would hope that that report would

bear out that kind of process where there is arm's length between the

applicant and any firm that is performing a plebiscite.

is also clear to me that the ministry should maintain the final word on

these matters. particularly in respect to smaller municipalities.

because of the costs in administration involved in them taking over any

of the responsibilities for the management of those plebiscites.

want to move on to another area which is at the moment not so clearly

defined in policy but where the minister has given some indication.

That's the area of licensed retail stores. The moratorium on those has

been lifted, and the minister announced that with the lifting of that

moratorium he might be setting up regulations for referenda before any

of these stores could be licensed. I would like to hear the minister

move quickly on that particular issue.

In fact, the Knight

Street area has a beer and wine store that was built with the

moratorium in place. The people in that community need to know what

process would be available to them to speak their minds on that

particular facility.

[ Page 4688 ]

Speaking

of my own community, there is great concern about the proliferation of

liquor outlets, and they will want to know what those processes are and

how they will be delivered through regulation and clearly defined

guidelines.

Finally, Mr. Speaker, I want to refer to a kind

of pub that presently sits outside the guidelines — the marine pub,

which is not like McBarge out on the water somewhere, but on land, and

is exempt from any of the licence rulings. I would encourage the

minister to follow the Jansen committee report and include marine pubs

with the same licensing procedures as neighbourhood pubs.

HON. L. HANSON :

The neighbourhood pub plebiscite system certainly has been in the news

recently. First of all, I would like to point out to the member

opposite that the plebiscite is, in fact, an opinion poll. It isn't an

enabling referendum; it's an opinion poll. The requirement for the vote

to be a majority of 60 percent is because it is an opinion poll, as

opposed to a very legalistic technical operation.

[10:15]

ministry recognized some difficulties with the plebiscite system in

that a little over a year ago — I believe in late 1986 — the mayors of

the various municipalities in British Columbia were drawn together, and

it was suggested to them that they might want to take a more active

part in this process. We were advised at that time that they had no

interest in taking

part in the process.

Since then — in

March of this year — my ministry first started meetings with the Union

of B.C. Municipalities to get a better understanding of how the

municipalities may take on part of the responsibility, or what part of

the responsibility they would like to take in the referendum process.

There's no suggestion in our minds that we might consider the cost of

that being anywhere but where it is now. It fairly and correctly lies

with the applicant, which is where it should stay. To whatever degree

the municipality wishes to take on that responsibility, we would be

more than happy to negotiate that with them.

It's

interesting that in this particular one that has had so much publicity

recently, the poll was held a year ago. There were very few complaints

issued at that time. As a matter of fact, I think the local

constituency office had one complaint. It was six months before there

were any issues raised.

Another matter of interest is that

after the poll was completed, the city of Vancouver sent out a letter

detailing the proposal at 57th and Knight to some 150 residences around

the area, and they had six responses. It is my understanding that five

were negative and one was in support of it. There are so many

conflicting things in that, but I don't think there is any question

that there is some concern with the system. I instructed my people long

before this came up that we should better codify the requirements of

the plebiscite so that it is a standard procedure with everyone.

Certainly

we would invite municipalities to take

part in the scrutinizing

process. I would have absolutely no opposition to that. It is a thing

that we would like to have happen, because it is of some interest to

us. By the way, we are also codifying some of the other licence issues

that are facing us.

I might just respond to the LRSs. Yes,

it is our intention that if in the original plebiscite that was held it

wasn't highlighted that there was going to be a cold wine and beer

store attached, there would be a requirement for another plebiscite.

guess the final statement the member made was to do with marine pubs.

The marine pubs do require a referendum if, at the discretion of the

general manager of licensing, he deems it to be a proper requirement.

They don't have to have one as such, but there is the jurisdictional

ability of the general manager to order it. Since my term in office, in

about 60 percent of the marine licences there had to be a referendum —

in those few cases.

With that, I believe the member for Vancouver South....

DEPUTY SPEAKER : Sorry, hon. members, but the time has now expired.

MS. A. HAGEN :

First of all, I would just like to comment that I hope the minister's

comments about the Knight Street pub do not in fact reflect on his

independent response when he hears the results of his inquiry. I think

it is important for him as minister to keep a totally open mind about

the result of that investigation he finally authorized.

want to just conclude in the moment or two that I have left with some

comments about my own community and its concerns around liquor

licensing, and to press again the urgency for regulations to move ahead

as quickly as possible. In the last week or so New Westminster has

developed guidelines around liquor licensing based on their point of

view that the city has reached a saturation point in the number of pub

and cabaret seats available. I haven't got the final count, but as

recently as early this year it was one for every two persons in the

city; and something like another 400 seats, as a result of cabaret

expansions and so on, are presently either approved or in the works.

The

relationship with your ministry, Mr. Minister of Labour and Consumer

Services, is an important one. I commend you on the committee that you

have struck with the UBCM. The representatives on that committee have

been well chosen. It's urgent, I think, in order to prevent the

proliferation of facilities, the access to liquor, that the kinds of

regulations that are going to be in place be clearly defined soon.

You've had a liquor policy review since last June; you've had an

ombudsman report, which has indicated that there are needs for

tightening up the regulations; you have municipalities who have done a

lot of work in this area. If you ever were in a position, as a

minister, to show good leadership, it is now, but that position will

pass you by if there are long delays with this.

I want to

see that there are clear regulations, clear guidelines. in written

form, ones that the community is aware of, as well as the liquor

interests and councils, so people do know what their democratic rights

are, and what those processes are that will enable them to control the

kinds of communities in which they live, in respect to access to liquor

outlets. I speak very strongly for my own community, that the ad hoc

procedures that we have undergone have produced a situation which is

now virtually untenable for the community. They want controls, and

those controls need to be worked out in cooperation between the

ministry and the municipalities involved. I look forward to those

results in very short order.

SOCIAL STUDIES RESOURCE PACKAGE

MR. REE :

I'm sorry, looking over the quarter of this chamber where the

opposition sits, that there is not a schoolteacher among them, although

I guess most of them in the opposition have some background to that. I

wish, under this

[ Page

4689 ]

subject, to put out a challenge to those in the opposition. I'm repeating a

challenge that the Minister of Education (Hon. Mr. Brummet) put out when he

first mentioned the binder — the social studies resource package — on May 11.

He put out a challenge for the opposition to condemn this book in part or in

whole; his challenge was basically in part. I would suggest it should be in

whole, but I don't think any members of the opposition, their leader or

in particular their critic. the member for Burnaby North (Mr. Jones), would

condemn even part of this pamphlet, because each and every one of them is subject

to the direction and control of their powerbrokers: the BCTF, the CLC and the

B.C. Federation of Labour.

They

are the authors of this particular book. This book — this pamphlet or

binder, whatever you call it — gives me a great deal of distress. It is

suggested by the opposition that it is a leveller for information that

was put out by the B.C. Chamber of Commerce. This book, if it is to

balance or level. tips the scales far past levelling. I don't think the

B.C. Chamber of Commerce information suggested that a resource person

from the Chamber of Commerce should be present for seven days in a

classroom while they're studying the Chamber of Commerce information.

This binder by the BCTF, the CLC and the B.C. Federation of Labour does

encourage a resource person who is not an educator, not necessarily a

teacher — a person from the unions — to be present in the classroom

when the book is being discussed.

It also suggests that

material presented by the students should be turned over to this

resource person, who is not a teacher. This suggestion sets up.... The

book does indoctrination. Turning the material over to the resource

person is identification; the result for the students would be

identification. Does that then, Mr. Speaker, lead to intimidation? I

suggest that if this material is followed, that's what can happen. I

think the parents of the grade 11 students of our province who may be

subjected to this should stand up and holler loud and clear, because

this material to be placed in the hands of our students is one of the

crimes of this century. It's a crime against the education system of

this province.

There is a picture in it that shows some

supposed students holding a placard. It suggests: "NDP Leeches." Excuse

me: I read that wrong. It says: "Socred B.C. Bloodsuckers." Do you

think any chamber of commerce, any member of the Ministry of Education

or any publicly elected school board official would condone and

encourage such material being placed before the students of this

province? It's a travesty to do such a thing.

Here we have

the leaders of the so-called education system, of the teachers — their

representatives, the BCTF: it's the BCTF that I'm talking about —

placing this material and suggesting this material be placed in

schools, not through the normal process.... It was not sent to the

Ministry of Education or to any school board to be approved. It was

sent directly to the teacher in the classroom. Fortunately our teachers

in the classrooms — the great majority of them — would be responsible

enough to probably throw this where it belongs: in the trash can.

point is that we have the opposition here standing up at times,

hollering about protecting the students. Will they stand up and do the

same thing with respect to this binder?

MR. S.D. SMITH : They endorse it.

MR. REE : I know they endorse it, and it's a terrible shame to this

community. Mr. Speaker, I don't think any member of the opposition will

stand up and condemn in whole or in part any of this binder or the videotape

that went with it. I don't think any member of that opposition has any moxie

whatsoever. Their leader has stood up at times and suggested that there is no

moxie. In the 21 benches of the opposition, I don't think there's a

moxie among them.

MR. LOVICK :

In the absence of the member for Burnaby North (Mr. Jones), our

Education critic, I am standing here to listen to the comments from the

member for North Vancouver-Capilano and to offer a brief response. I

would like to say that I'm delighted to be standing here to participate

in a reasonable, rational, fair debate about the validity of a

particular issue. Instead, I feel rather like the characters in the

1950s who were subjected to the slander campaign of the McCarthy era.

[10:30]

Quite

frankly, I think the member's comments with their blend of innuendo.

half-truths and misleading statements do no -good service to this

House. As a former college instructor — I grant you I'm not a

schoolteacher — who taught industrial relations courses, I have

examined some of that material. I grant quite clearly that the material

presents a perspective of society very different from the middle-class

comfortable one most of us are used to. I am offended by what I would

call the lapses in good taste in the material.

Please,

friends opposite, pay attention to the point I'm making. To draw from

that that somehow the material has no place in the classroom is lunacy

in the extreme. It frankly smacks of a kind of censorship we can

certainly do without. The member offers a challenge to teachers, and I

would suggest that is precisely the context in which that material must

be seen. It represents a perspective entirely different from what most

of us take for granted and have been socialized to accept.

background is as middle class as is anybody else's in this House.

However, I've also done sufficient academic work to know that is not

the only perspective on society. There is another model of society made

respectable by about 150 years of discipline called sociology that

posits something called stratification and something called a conflict

model of society. It suggests that decisions get made in the naked

arena of power fighting power. That's the view that certainly creeps in

to those materials presented by the B.C. Fed, the BCTF, the CLC and

whoever else may be involved.

The member again asks us to

condemn the whole. Frankly, anybody who does that scares me to death.

To be sure. there may be parts we have disagreement with. but there are

also parts of that document — and I've looked at bits and pieces: I

certainly don't claim expertise — that have a very high standing in the

intellectual community. For example, there is an essay by Prof. Mel

Watkins, who is regarded as one of the half dozen best and most

prestigious economists in this country. There is also an essay by Prof.

John Langford of public administration at the University of Victoria,

with whom I shared a panel discussion some months ago. and who told me

and the audience that he was a small "l" liberal. He wrote one of the

essays that the member would have us throw out.

I am

suggesting then that what we have in the member's comments amounts to a

kind of slander. To suggest that the material somehow has been snuck

into the schools is quite simply erroneous. That is not the case.

Indeed, the fact is that the material from the so-called other side

went through a

[ Page 4690 ]

similar

process. For example, the thing called "Project Business", as I

understand it, was not subjected to any political approval by school

boards prior to its use in school districts. Neither has a wide variety

of other material been subjected to that scrutinizing process.

must not fall into the trap — because our particular sensibilities are

offended — of suddenly coming down with the heavy hand of regulation

and control which these would-be self-proclaimed small V conservatives

are very happy to invoke and make use of when it suits their

ideological purposes. That strikes me as hypocrisy in the extreme.

MR. REE :

I was pleased to hear the member suggest that this material certainly

lacked good taste. The taste in my mouth with respect to this material

— and I think anybody else who looks at it — would be sour. It would be

bad taste.

Some of this material is recognized to be of

value, but intermingled with the bad apples of the barrel, it lacks the

common sense, intelligence, wisdom and intent of good direction towards

the students of our province for the BCTF to compile, edit and submit

this to any educational institution. As I said, it breathes of

indoctrination, identification, intimidation.

The member

says I send out a challenge to teachers. No, Mr. Speaker, my challenge

is to the members of this House and the members of the opposition — not

necessarily condemn the whole but condemn any part of it. They have not

had the moxie to stand on their feet and make any comments.

MR. LOVICK : You changed your position. You didn't say that ten minutes ago.

MR. REE : That educator, the second member for Nanaimo, has lectured this House many times.

MR. LOVICK : It hasn't sunk in, sadly.

MR. REE :

Unfortunately it hasn't, Mr. Speaker. I should say fortunately it

hasn't, not unfortunately. He's got the ten syllable words and all

that. I'm not that well versed in it, but my father often said that one

who uses profanity shows a lack of education and an insufficient

vocabulary to properly express themselves. I've heard that from the

second member for Nanaimo a number of times, and I appreciated his

comment the other day of "chunks of paper."

However, I go

back and throw the challenge out, as did the Minister of Education

(Hon. Mr. Brummet), to the members of the opposition. I throw the

challenge out to the media to report this. You've seen very little; the

only parts you've seen on the media have come from those independent

editorial writers or independent commentators in the newspapers. You

have not seen any articles by the reporters of the newspaper media,

who, I also suggest, are affiliated with the CLC and the B.C. Fed.

Interjections.

MR. REE : The challenge is still thrown out. I suggest that the members of the opposition have no moxie.

LOSING TOUCH: 30 YEARS OF SOCIAL CREDIT

MR. SIHOTA :

It is often said in politics that perception is reality. Over the last

couple of weeks and months I've done a fair bit of traveling around

this province and also spent a fair bit of time in my riding once I got

through on the estimates. I want to communicate to the House today that

as I go around and talk to people, we notice a subtle shift in

perceptions, a shift that's not necessarily picked up by all those

horse-race public opinion polls that we see, but yet it represents a

very significant change in British Columbia politics. People around

this entire province are beginning to ask themselves just who it is

that the Social Credit Party speaks for.

The perception,

rightly or wrongly, is that the Social Credit Party that the

Bermetts built was a broadly based coalition. Heck, it even got some of

the labour vote in this province. That perception was strong enough to

allow it to win 11 of 12 elections. There was a feeling, rightly or

wrongly, that it listened to the average British Columbian. Now people

are saying that the Socreds used to represent ordinary people but that

more and more they seem to be tied to big business and the wealthy.

People throughout this province are saying that the Socreds are out of

touch, they're out of step with ordinary British Columbians; that they

don't listen to the views of British Columbians. People are saying that

the Socreds are causing confrontation and chaos throughout British

Columbia.

In short, people are now saying this is not the

party that the Bennett family built. If you look at the situation,

there's good reason for them to feel that way. Consider, for example,

the government's privatization initiatives — on highways in particular.

The government won't listen to the first member for Cariboo (Mr. A.

Fraser), the former Minister of Highways, when he tells them that

privatization doesn't make sense. The government won't listen to deputy

ministers, to loyal and committed civil servants who are saying that

the privatization scheme makes no sense. They won't listen to 85

municipalities representing thousands of British Columbians expressing

their horror over highway privatization.

Take, for example,

the abortion issue. The government chose at one time to deny coverage

even to rape and incest victims. Average, ordinary British Columbians,

particularly women, who had voted Social Credit, thought of themselves

and their daughters and realized how out of touch this government was

and the extent to which this party was prepared to impose its own views

on people. The feeling, rightly or wrongly, was that the Bennett

government was not prepared to impose its own views on the abortion

issue.

Take a look at the two budgets we've seen from this

government. They eliminated the surtax on the wealthy. Who were the

Socreds speaking for when they did that? Of course, the wealthy. They

increased taxes to the average family by $1,400. They weren't speaking

for families when they increased the tax rate for families by $1,400.

They increased the rate of taxation for small business to the point now

where it's the second highest rate of taxation for small businesses in

Canada. They clearly weren't speaking for small businesses. They didn't

increase the taxation rate for large corporations, which gives an

indication of who it is that this government and this party is now

speaking for.

They assaulted seniors in their budget with

fee hikes. They're not speaking for seniors and their families. It's

becoming more and more evident that this is a party for the wealthy,

for the few. It is a party that is not interested or committed to

serving the needs of average British Columbians, but instead to serving

the needs of their friends.

In some ways, their words speak

louder than their actions. When people lining up for heart surgery were

complaining about the long line-ups, they were told that their

[ Page 4691 ]

operation

was trendy. When innocent investors lost money in Principal Trust, they

were told that they were greedy gamblers. When mothers complained about

welfare rates, they were told to turn to Jesus. When children asked for

food, the government told them that they weren't loved.

The

people of this province know that this is a radical, right-wing

government. It is a party that imposes its radical agenda on the people

of British Columbia. It is a party which after being in power for 30

years has all of the trappings of arrogance. People feel that this is a

party that is out of touch, and the perception now, as we go around

this province, is that this is a party that used to represent people

but now more and more seems to be listening to and representing the

wealthy and big business. The feeling across this province, rightfully,

is that it's time for a change.

HON. MR. STRACHAN :

The member comments that we're losing touch after 30 years of Social

Credit. Well, I'd like to talk briefly about the 30 years of Social

Credit and the record that this party has in the province. It's very

easy for the graduate from St. George's who lives down here in

Esquimalt to not be aware of what's happened in the great central

interior of the province, and not be aware of why this party, in its 30

year history, developed this province. I'll give you a good perspective

from a Prince George point of view.

[10:45]

The

province of British Columbia, particularly the central interior, grew

magnificently during the regime of W.A.C. Bennett, W.R. Bennett — not

so much during your term from '72 to '75; things kind of stopped there

— and under the current administration. It was W.A.C. Bennett who built

the great highway system, who encouraged the pulp mills to establish in

the central interior, who established the forest licences, the PGE, the

BCR, the transportation system, the Hudson's Hope dam, all that

infrastructure — a man of vision and a government of vision, and we've

always been that.

Good vision developed this province from

just a lower mainland perspective, where nothing really existed past

the Pattullo Bridge, to a great province and probably one of the most

dynamic economic communities in North America.

The member

pointed out that we have had, as a Social Credit Party, support from

the labour sector. You're absolutely right. During the mid-fifties the

percentage of certified workers in the province was about the

mid-fifties. At the height of W.A.C. Bennett's popularity, the fifties

and the sixties, 45 to 50 percent of the working people in the province

were in organized labour, and they continually returned Social Credit

governments, government after government. There's no question that we

were and still are the party representing the man in the street, the

guy with the lunch bucket, the community. The men and women that you

think will vote for you in fact don't; it's clear. You talk about being

a party of the people. You were the party that wanted, in a policy when

you were government, to give the whole energy package to the federal

government. You were opposed to the Coquihalla Highway, a highway that

opened up the interior considerably. You were opposed to the billing

number legislation that would allow better medical practice in the

rural areas. As a matter of fact, it caused one of your members to

cross the floor. It was the first one I've seen and probably the last

one I'll see in my experience here, but a fellow, a good rural member

who represented his riding well and could not stomach NDP centralist

philosophy, crossed the floor.

MR. LOVICK : Because he knew he was going to lose his seat. Let's be serious.

HON. MR. STRACHAN :

No, I am being serious. He crossed.... That's a pretty glib, inhuman,

insensitive statement to say about Al Passarell. You ought to be

ashamed of yourself, really. The guy had the courage of his convictions

— the most courageous guy I've seen in this House, the gutsiest move

I've seen, the courage of his convictions to represent his riding and

do the right thing for the people of Atlin.

Interjection.

HON. MR. STRACHAN :

Al Passarell is maudlin junk? You ought to be ashamed of yourself. I'm

talking about Bill 41 and your party's position on it, which in fact

was totally opposed to health care in the rural areas, and you know it;

it's on the record.

You bring in the first member for

Cariboo (Mr. A. Fraser). Well, he's made some interesting statements;

but look at the record. Under his administration as Minister of

Highways from 1976 to about 1986, 30 to 40 percent of the highways

system was privatized in terms of maintenance. The record is clear.

It's done now. Leave Esquimalt-Port Renfrew. Go to the interior. See

the private contractors doing the side roads. It's all over. You'll see

it; it's clear. It was done under the administration of that Minister

of Highways. So don't kid yourself. He's maybe saying some interesting

things now, but that highway system has been privatized for some time,

and it was led under his administration.

I see the time is

running short, Mr. Speaker, but I have to totally reject out of hand

that we've lost touch. We are broadly based. Just look at the number of

seats and the way we're represented in this Legislative Assembly. You

will see that your NDP party is dominated by the lower mainland. We

represent the real part of the province.

MR. SIHOTA :

I want to respond by saying, first of all, that it's interesting to

note that the member, in his reply, stuck to the record of the past and

made no comment with respect to events of the present. There was no

defence of the budget. There was no defence of the attack on seniors,

of the abortion policy or of privatization. We're talking about the

present. We're talking about the way in which this party has changed.

Let's

talk about the current record, Mr. Speaker. When Highways workers in

this province speak out against the government's privatization

initiatives, they're fired. Whatever happened to respect for freedom of

speech? People in this province always put a value on freedom of

speech, but this government won't tolerate it. When uranium protesters

come onto the steps of the Legislature, the government takes immediate

actions to evict them. Whatever happened to freedom of expression?

Whatever happened to the right of dissent in a free and democratic

society? When people are cut back on their welfare rates, they're told

to turn to Jesus. Whatever happened to recognizing the multicultural,

multi-faith nature of this province'? Whatever happened to freedom of

religion? This government doesn't understand the concept. When the

government isn't happy with its reporting of its activities, it calls

in select members of the press to try to control the message. Whatever

happened to freedom of the press?

The problem with this

government, Mr. Speaker, is that it is out of touch. It doesn't

understand the wishes of the people of this province. It would prefer

to shoot the messengers — like the media — than to examine its own

failings. It would

[ Page 4692 ]

choose

to speak out in favour of the wealthy and the vested interests in this

province. Witness the actions, or inaction, of the Minister of Finance

(Hon. Mr. Couvelier) with respect to the stock exchange. That's where

this government is coming from.

People are saying that 30

years is enough. The arrogance, confrontation and not listening are

intolerable. There has been a breach of faith, a breach of promise, in

moving away from the promises of open government to creating the

confrontation that we now see in British Columbia. It is a government

that won't listen. As people say, it is a government that no longer

represents ordinary people but represents the wealthy.

THE VALUE OF PART-TIME FARMERS

MR. PETERSON :

Today I'd like to talk for a little while about part-time farmers and

the contributions they make to both a lifestyle and the economy of

British Columbia.

Part-time farming offers both a relaxed,

comfortable lifestyle and a boost to the local economy. Nowhere is this

more evident than in British Columbia, where of the 19,063 farms in the

province, over half can be defined as part-time or sometimes as hobby

farms.

Hobby farmers hold over 28 percent of the total

farmland in the province. Of the almost six million acres of

agricultural land in B.C., 1.7 million acres are owned or operated by

hobby farmers. That's 1.7 million acres that they utilize, bring under

cultivation and use for various agricultural purposes. I think that's

an amazing figure.

In addition to the intangible benefits

that part-time farmers derive from their endeavours, their efforts

provide an important boost to the B.C. economy, estimated at about $84

million in direct expenditures — an amazing number. These direct

expenditures ripple through B.C.'s economy to add to our provincial

gross domestic product. This economic stimulus supports jobs and

industries that service the local farming community. The dollars spent

by the part-time farmer support the job of the sales clerk who sells

the fertilizer and lime needed for the farmer's crop. These indirect

benefits that result from the ripple effect on the provincial economy

from the spending of hobby farmers cannot be overlooked. As well, the

hobby farmer is an employer of seasonal labour.

I'd like to

touch on some other things that part-time farmers do. Quite a few —

particularly in my constituency of Langley — are seed stock producers.

These are purebred breeders, and whether they be raising poultry, hogs,

sheep or cattle, they work very diligently in attempting to improve

their respective breeds, and they are a great resource to the larger

commercial farmers in our province. The bottom line is to produce a

better product for the consumers, and because of their smaller

operations, part-time farmers have the mobility to experiment in

breeding more efficient seed stock for the commercial operations. They

make a very tangible, significant contribution to the total economic

agricultural picture in this province.

In addition — it's

very hard to put a yardstick on this -part-time farmers are usually

family endeavours. Many of the young people from these families, who

have discovered the rewards — both in lifestyle and financially — of

working in agriculture with their parents, have gone on to pursue

fulltime careers related to agriculture.

I can name a few

whom I know personally. I know one individual who was a seed stock

producer with his parents, was in 4-H and thoroughly enjoyed the

agricultural sector. Coming off a small, part-time farm, this

individual is now operating and managing one of the larger cattle

ranches in British Columbia. We've got well-known showmen who come out

of the 4-H Clubs and are being hired by internationally acclaimed

shows, such as the Agribition in Regina, the Pacific National

Exhibition here and the Royal Agricultural Winter Fair in eastern

Ontario.

There are a lot of British Columbia youth who have

got their training through part-time farms and have developed this into

a full-time career. As I say, it is very difficult to put a tangible

yardstick on that, but it has given them a vocation that's actually

more than a vocation; it's an avocation. It is something they really

enjoy.

I could go on to horse breeding, for instance. Even

some of our people who really excel at equestrian activities come from

small, part-time farms where they pursued that hobby. Pardon me?

MR. CLARK : Did you guys raise taxes on small farms?

MR. PETERSON : I might talk about that a little later.

MR. BLENCOE : That's another statement.

MR. PETERSON :

Certainly. I could delve into that right now, but I really wanted to

point out that there are very real, hard, economic generators from

part-time farms, but there are also intangible benefits: a lifestyle

training for our youth, so they can go on and pursue full-time careers

in the agricultural sector. It gives them a real opportunity, which in

some sectors they don't have. If you decided that you wanted to enter

engineering, how do you really tell? But with agriculture, by being

part of a part-time job, you've had the ability to ask: "Gee, is this

something that I like, something that I enjoy doing?"

want to point out to this House that part-time farmers play a

significant

part in the development of our future generation of people

who work in the agricultural sector. Whether it be on the farm itself;

whether it be future veterinarians; whether it be individuals who go on

to attend UBC, the fine agricultural school we've got there, and do

research to more efficiently develop our agricultural sector; I think

the contribution is major and significant and should never be

overlooked.

I'll leave it at that for the time being, Mr. Speaker.

[11:00]

DEPUTY SPEAKER : Hon. members, with your indulgence, the member for Mackenzie has asked leave to make an introduction.

Leave granted.

MR. LONG :

Mr. Speaker, today in the House we have two parents and two teachers

and 19 students from the Nusatsum elementary school in Hagensborg, a

small school in a small town in the Bella Coola valley, which is very

beautiful. I would like to have the House make them welcome here today.

MR. STUPICH :

I'd like to associate myself with the remarks from the member about

part-time farming in British Columbia. I was raised on a small farm on

Vancouver Island

[ Page 4693 ]

that

my father operated as a part-time farm. It was that experience, I

think, that made me interested in agriculture. not so much as a way of

life but as a way of expressing concern for those who are engaged in

farming, whether it be full-time or part-time. It was that experience

that stood me in good stead when I had an opportunity to serve as

Minister of Agriculture in the province of British Columbia for just

over three years.

The legislation that the NDP government

brought in was intended to maintain the family farm, whether it be

part-time or full-time, as a way of life in the province of British

Columbia. We worked hard to accomplish that; I'm not saying me

individually, but certainly the government worked hard to accomplish

that. We brought in legislation. As a matter of fact, the legislative

package that we brought in in our three years was more extensive in the

number of bills than in the whole preceding 20 years of Social Credit

administration. That's just an example of the determination that we

exhibited in our attempts to help small-time farmers and fulltime

farmers in the province of British Columbia.

Full-time

farmers, generally, could get along; there are good years and bad

years, but generally they can manage. It's the part-time farmer that

has the problems. Our legislation applied to both. The agricultural

credit legislation we brought in was available to part-time farmers as

well as full-time, and it was of great assistance to both.

note that one of the first things that the Social Credit administration

started doing when it was re-elected in December 1975, and is still

doing — one of my colleagues has commented on this — was to start

increasing the rate of property tax on rural land, including that owned

by part-time farmers. When we left office, it was 10 mills; I think now

it's up above 30. I'm not sure of the exact figure, but it's something

like triple the rate that it was when we left office. That's not the

way to help part-time farmers, or any farmers, survive.

There's

the question of the farm income assurance that was available to anyone

producing food. It was available to part-time farmers and to full-time

farmers. It was important. A lot of the fruit grown in the Okanagan

Valley is grown by part-time farmers, generally because they need some

other source of income to supplement their farming work. They look on

farming as a way of life; that's true in the Okanagan Valley, the

Fraser Valley and the Saanich Peninsula. It's a way of life, but one

that has to be supported by income from some other source. Even when we

were in office, that was the case. Nevertheless, we tried to make it

easier to make a living fanning, and not to be so dependent upon

outside sources of income.

If I could just mention the

Agricultural Land Commission Act itself, and my concern there as to

what is happening to the land reserve, it seems to be used as a way of

keeping land off the market until some friend of the cabinet wants to

get that land out to make a fantastic amount of money for himself or

herself, and that's when the land comes out. This is serious for

full-time farmers and also for part-time farmers because of the

difficulty of operating a small farm when you're surrounded by

neighbours who are not farming. The farming activities extend from

early morning to late night, particularly when the days are long. The

activities that include necessary weed control, disease control and

insect control are carried out on small farms and are not accepted by

neighbours working an eight-hour shift. They want to sleep in the

morning, and they want to get to bed at night.

Destroying

the land reserve, which is what the government has been doing for the

last ten years or so, means that the ability to carry on small-time

farming in British Columbia is being more and more curtailed. If the

government is allowed to do this, the best areas.... For example,

that's happening in Richmond now, where that kind of land is taken out

of the ALR, and there is a lot of small-time farming going on in those

areas. The ability to carry on small farms where there is a heavy

population.... That's where people do small-time farming particularly —

near centres of large population.

HON. MR. REID : Like Tilbury Island.

MR. STUPICH :

I'll admit what we did to Tilbury Island wasn’t my choice, but it

happened. But you stack Tilbury Island up against everything that this

government has done since it was re-elected in 1975 — one instance

against a hundred.

MR. PETERSON : Just before I

begin, I would like to acknowledge the first member for Nanaimo's

contribution to the agricultural sector in this province when he was

Agriculture minister. I think he did a reasonably good job in view of

the constraints of the party he belonged to.

However, he

talks about the agricultural land reserve. It's interesting to note

that — if my memory serves me correctly — when he was the Agriculture

minister in this province, he was a member of the first cabinet to ever

remove good farming land from the agricultural land reserve. It was

referred to as the Campbell Creek estate. I believe it was the Molson

hop farm.

Over 400 acres were taken out of the agricultural

land reserve by the members opposite when they were government — 400

excellent producing agricultural acres — and they over-ruled their own

Agricultural Land Commission because it was big brother government.

They wanted it for some Crown corporation enterprise they were doing,

so they went against their own particular philosophy. They went against

everything they said. I have a lot of respect for the first member for

Nanaimo, and it just amazes me that he would even bring this up. It

really amazes me.

MR. BLENCOE : You're easily amazed.

MR. PETERSON : Actually, I'm not amazed. I should say it doesn't surprise me in the least.

reason for getting up and speaking about the small farmer, the

part-time farmer, the hobby farmer — however you want to classify him —

was not to get into an argument with the opposition. I would never want

to do that. I wanted to highlight the importance of that sector in

British Columbia's economy and also to speak about that lifestyle,

because it is a bit of a snapshot back in time in the current

fast-paced world and the dramatic changes we go through very

consistently; it’s a nice feeling. It's a lifestyle that's enjoyed by

many, yet it's productive; it's family oriented, and it provides us in

British Columbia a means of activating the agricultural potential of

many small pieces of property that probably would go to waste.

DEPUTY SPEAKER : The second member for Richmond would like to make an introduction. Shall leave be granted?

[ Page 4694 ]

Leave granted.

MR. LOENEN :

It gives me a great deal of pleasure to introduce four students from

the Duncan Christian School who are accompanied by their teacher Mrs.

Spyksma, who has been a personal friend of mine for many years. I am

just delighted that they are here, and I ask the House to give them a

hearty welcome.

HON. MR. STRACHAN : Mr. Speaker, I call committee on Bill 30.

PETROLEUM AND NATURAL GAS

AMENDMENT ACT, 1988

The House in committee on Bill 30; Mr. De Jong in the chair.

section 1.

MR. CLARK :

Many of the clauses we won't have any problem with, but we could have

some discussion on the first clause and we can cover most of my

concerns. I guess the first clause deals with a number of things. First

of all, it seems to me — maybe the minister can clarify this — that it

allows the ministry to allow royalty holidays for specific wells as

opposed to.... As I understand it, now wildcat wells have a royalty

holiday. A subsequent

section eliminates that, I think, as a category,

but this

section allows specific designation for specific wells. If the

minister will confirm that that's the case, I'll support that, because

I think that's a good move that allows for some flexibility for

government to deal with it. I might argue that it is, however,

potentially open to abuse, because it's done by regulation, so it

allows the minister or the ministry to provide royalty holidays without

purview of the House in terms of debate or discussion. Nevertheless, I

think it eliminates across-the-board royalty holidays, essentially, but

allows the minister to designate by L-G-in-Council specific categories

for such holidays. Is that correct?

HON. MR. DAVIS :

Yes, that is correct. By regulation, the minister can do a variety of

things. The current practice, however, is to allow a three-year royalty

holiday only for new wells in new development areas. It's not general.

But the regulations could be amended to do other things. In fact,

that's not our intention. We merely want to limit the royalty holiday

to new wells in new areas to encourage new development, but not to

benefit financially in any way established wells or new wells in

established areas.

MR. CLARK : Thank you. I agree. I

think that's a positive move, but I do understand that a subsequent

section, which we can get to, essentially eliminates that automatic

holiday for new wells in new areas, at least by statute - that's how I

read it. So this allows you to do it via regulation, but eliminates the

statute which does it across the board. Is that correct?

HON. MR. DAVIS :

Yes, and the royalty holidays that are presently available have a

sunset clause on them, so a new well in a new area three years from now

doesn't necessarily receive a three-year exemption.

[11:15]

MR. CLARK :

This clause, as I understand it, does a number of other things. it says

that the government won't refund for overpayment in order to simplify

things. I understand that it adds that you credit future payments. So

instead of actually refunding a cheque and then collecting more later

on, you give the company a credit against future royalty payments. I

don't have any problem with that. I wonder if there's any provision,

however, for what happens if a well becomes defunct. Maybe I'm

ignorant on this point, but maybe the minister could help me with this,

because it seems to me that if you're crediting against future payments

and there are no future payments, then I don't know if there's a

provision in the act to provide for such a refund down the road if

that's possible. Is that a possible scenario, or is that so unlikely

that it's not worth worrying about?

HON. MR. DAVIS :

Joan Hesketh, who's energy policy adviser, tells me that the bill

allows the minister to make refunds, but there's a time limit as to how

late in the game the minister can make the refund. That time limit, I

believe, is six years. So refunds are possible. Refunds might not only

come through future liabilities, but can be made from time to time as

the occasion demands.

MR. CLARK : That sounds

reasonable. I don't see it in the bill. Is it in the bill? He mentioned

that it was in the bill; maybe it's in a regulation. Perhaps the

minister could just clarify that point for me.

HON. MR. DAVIS :

I am advised that this bill gives flexibility, but it does set a time

limit as to the time during which the rebate can be made. The timing is

in the regulation.

MR. CLARK : It's not in the bill; it's in the regulations. That's what I was trying to get at.

One

of the points that the and auditor- general's report made.... As the

minister and others know, it was a rather scathing indictment of the

attempt to change. I can sympathize to some extent with the ministry,

because there is essentially a revolution happening in the regulatory

field in natural gas, so it may be difficult. Nevertheless, I don't

think that's an excuse.

The auditor-general pointed out a

number of concerns, one of which was the failure to pay the appropriate

amount. This addresses some of the concerns. One of the concerns they

raised, and I think it's a valid one, is the potential problem with a

tempting combination of self-auditing or self regulation, the notion

that the company has to determine what the royalty is to be paid and

has to remit that appropriate payment. As I recall, the auditor-general

said that the ministry did not have the audit capacity to deal with

this problem and that relying on the companies themselves to remit the

appropriate amount, on top of all of the confusion with respect to the

regulations, caused concern for the auditor-general.

You've

clarified the regulations for the companies, and I agree with that and

that's a good part of the bill. But I don't think you've dealt with the

problem. Maybe the minister could tell me, under this section, whether

or not the ministry now has the capacity to effectively audit what is

still, under this bill, a self-regulatory or self-paying kind of

regime. I have some concerns with it, and clearly the auditor-general

pointed out some concerns.

HON. MR. DAVIS : First, with restraint, the numbers of staff people capable and available to follow up on a complicated

[ Page 4695 ]

system....

Their abilities were limited in part by their numbers. The job was

rendered difficult because they not only had to know with certainty

what the revenue was to the producer -well by well, but they also had

to know with certainty what the costs were. This new scheme eliminates

the need to know all about costs. I think the member is asking: is this

still in some measure a self-regulatory regime? It is in some measure,

but we now certainly have the follow-up capability to monitor, to check

out the figures on sales. We're introducing a sales-tax regime as

distinct from a much more involved — certainly from a follow-up point

of view — profits-tax regime. Yes, some revenue was missed, but the

ministry, the government, is in the process of recovering the missed

revenues.

The auditor-general's staff had the advantage of

coming in and talking to staff who were in the midst of preparing a new

regime, and were able to pick up the criticisms of the old and report

them and, I think, report them accurately. But we moved to a much

simpler regime and a relatively small staff that has a much better

chance of doing a good job — certainly a monitoring job — than it had

previously.

MR. CLARK : I appreciate that the

minister is basically saying that it was the complication in the old

formula that led to not necessarily abuse but inappropriate collection

by the government, because it was so complicated for the companies

themselves that they didn't know what the appropriate amount was. This

clarifies that for the companies involved; therefore it will be an

easier process.

It still doesn't deal with the rather

tempting combination of having them determine how much they have to

pay, but I guess I understand your point that because it's much simpler

the staff of the ministry will be able to keep on top of the payments

and audit them. I hope that's correct, and I suspect it certainly is in

some measure. I'm not yet convinced, and it will remain to be seen

whether you really do accomplish all you've set out to with this regime.

want to ask a couple of questions. I have some information and I want

the minister to tell me whether it is, in fact, correct. As I

understand it, the auditor-general audited regulations in 1987 which

had in fact already been amended in House, and his report did not

capture the full impact of double-dipping by companies — double-dipping

meaning those who deducted costs of service both when calculating the

royalty rate and when calculating the royalty payable. which, as I

understand it, was one of the focuses of concern Of the

auditor-general. Therefore the auditor-general's findings dramatically

underestimate the amount of revenue lost to the Crown for that period.

In fact, between July 1985 and May 1987 the auditor-general reported

that the loss to the Crown was $1.5 million, when in fact the figure is

closer to $7 million. Would the minister confirm that?

HON. MR. DAVIS :

There's some truth in what the member is saying. The tax missed has

subsequently been picked up. Yes, there was a brand-new system brought

in in 1985, a brand-new system which was also very complicated. There

were loopholes in it, if I can put it that way. They were subsequently

plugged by changes in regulation, and the ministry is still in the

process of recovering moneys which lawfully were owed to it.

The

problems of that short-profits tax regime are being overcome, but it's

irrelevant for the future because we have an entirely new, much simpler

regime to administer.

MR. CLARK : I understand that

this bill rectifies that problem. Will the minister agree that the

number is not $1.5 million but in fact $7 million?

HON. MR. DAVIS :

Certainly I can check and find out what the number was, but I simply

would be taking a number Given to the House by a member opposite. I

have no knowledge of what the higher number is or might be.

MR. CLARK :

I certainly won't belabour the point, because we basically agree that

restraint caused a lack of monitoring capability and that because you

are bringing in a complicated regime, there were all kinds of loopholes

and double-dipping and complications and confusion in the industry.

Millions of dollars were lost to the Crown, which you are now

rectifying. I'm not saying.... Nevertheless, it is hopeful that you

have caught it, or the auditor-general has caught it with your staff,

and that you are now moving to rectify it.

I think it is an

indictment, however, of moving in this way if you are going to move to

a complicated, new and radically different system as you were or the

previous government was. It's simply not very good public

administration to allow that kind of thing to happen. It's encouraging.

I give him some credit for catching it now and rectifying it. I still

think — and I don't want to labour the point — that the revenue

generated by the Crown is not adequate for the resource, but that's

another debate.

One last point on this section. It appears

that

Section 1(

h) makes a regulation which allows for the privatization

of B.C. Petroleum Corporation. Is that correct?

HON. MR. DAVIS :

No. that's not true. In fact, the Petroleum Corporation for some years

has not been the exclusive purchaser of gas in British Columbia, since

the royalty regime was introduced in '84-85. Today the Petroleum

Corporation is buying something of the order of 80 percent of all the

gas produced in the Peace River area. For many years it was the

exclusive buyer. It bought 100 percent. The revenue to the Crown

essentially was generated by the Petroleum Corporation buying at one

price — it was the sole buyer — and selling to the B.C. utilities and

at the border at higher prices. the difference being the dividend or

yield or product going to the Crown.

In 1984, the

government of the day switched over to a royalty regime which is common

elsewhere on the continent and endeavoured to collect the moneys by

taxing production of the well-head as opposed to being the exclusive

buyer and marketer of B.C. gas. Of course. in the intervening years,

the selling price has dropped dramatically, largely because the world

oil prices went down and competitive prices everywhere have been much

more onerous as far as the producer is concerned.

However

the royalty regime, as designed in '64, was intended to recover the

same order of magnitude of revenue to the Crown as the previous regime

did. In theory, it was a good tax system. It was a profits tax, it

captured the economic rent to the province. But being a profits tax is

much more complicated from an administrative point of view, and the

complication. the fact that it was a brand-new tax, led to some

administrative problems, some revenue missed which is now being picked

up. Now we've switched back really to a much simpler regime of the type

which used to be in place generally across the continent. It is in

place in most jurisdictions in North America.

[ Page 4696 ]

MR. CLARK :

I realize it's more complicated to collect the profits-based tax, and

it's also easier for a company to distort the tax that would be paid,

which is why we moved in many respects, not just in British Columbia

but in other jurisdictions, for the Crown to more effectively capture

that economic rent through other mechanisms because of the.... Now

we're moving back. I think that's regrettable, but so be it.

If the purpose of

section 1(

h) is not for the privatization of BCPC, could the minister explain what the purpose of it is?

[11:30]

HON. MR. DAVIS : In the

earlier years of the B.C. Petroleum Corporation, some producers,

because of existing contracts, sold gas other than to the B.C.

Petroleum Corporation, and a device was developed to capture the

royalty equivalent. This clause really relates to history and has

nothing much to do with the future, but it covers off a wrinkle that

existed because not every company sold through the BCPC.

MR. CLARK : What you're saying is that it's now 80 percent and this regulates the 20 percent, essentially.

HON. MR. DAVIS :

Today, all gas pays the new type royalty. This clause, I'm told, is

merely to cover off an historic situation and make the treatment of all

producers uniform. All producers, whether they sell to the Petroleum

Corporation directly — and they are obliged to do this because of

historic contracts — or to someone else, such as Prince George Paper or

whoever, pay the royalty.

MR. CLARK : I don't want to

belabour the point, but I'm not quite there. Maybe the minister could

explain why.... Are you saying that those companies that did not sell

to BCPC since '85, or the new regime, or that were selling to...that

some companies didn't pay a royalty because they sold directly to the

industrial consumer?

HON. MR. DAVIS : It has to do

with implicit and explicit payment of royalties. I'm not clear as to

what this does, but essentially it clears off this history and puts

everyone on the same basis for the future. Whether or not they sold

directly to the Petroleum Corporation after 1984 is irrelevant for the

future. Everyone pays the new royalty. It's eliminating one of a large

number of anomalies and details in administration which made it

difficult to collect the true tax.

MR. CLARK : Would the minister agree that it also covers the possible eventuality of a privatized B.C. Petroleum Corporation?

HON. MR. DAVIS :

I'm told this is not a new clause. It's one of several sub-items in

this

section which are taken directly from earlier legislation, but it

does deal with some anomalies that we don't want to carry over into the

future.

MR. CLARK : So you're telling me this is

really an innocuous clause and there's no hidden messages here or

anything else, and if there is one I can beat you up later on it.

HON. MR. DAVIS : If you leave it much later, I'll understand what it is, and then you won't be able to beat me up.

MR. CLARK : I guess the last question is: how did you arrive at the 15 percent royalty figure?

HON. MR. DAVIS :

Simply put, I asked our staff what flat rate would yield the same

return to the Crown as the complicated system we had previously. The 15

percent, as I understand it, can be altered to some other figure by

regulation, but the 15 percent does yield the same revenue to the

treasury. The principal debate in Treasury Board was whether it yielded

enough, or at least would yield as much. I argued that we would attract

more activity with a system that is not only simpler than Alberta's but

a little more tolerant, and that we would get more revenue.

MR. CLARK :

So you argued a supply-side argument. I imagine it was very difficult

to come up with a revenue neutral number given the complexity of the

previous regime that you're moving for. I hope you erred a little on

the higher side than on the lower. I'm sure Treasury Board made you

justify those remarks.

Is it true that this bill, in this

section and its number, was arrived at in consultation with the

industry? Although I don't get all the correspondence from your

ministry, I have seen correspondence with the independent petroleum

producers and others regarding this review. This was a result of

consultation with the industry, and a similar situation is happening in

Alberta with respect to.... Is that true?

HON. MR. DAVIS :

Yes, Mr. Chairman, there have been extensive consultations with the

industry. In a general sense, the industry welcomes this new royalty

regime because it's simpler and easier to understand. However, moving

from a profits tax scheme to a simple sales tax does, in the eyes of

producers who have a very small profit margin and have cost

problems.... They see themselves as faced with paying a higher tax. So

there are some producers who at least in the short term would regard

this as onerous because they're going to have to pay more tax.

MR. CLARK :

So this is a royalty; it's not a profits-based tax. In second reading

the minister did use the terms interchangeably, which I had some

objection to at the time, if you recall. Is it a 15 percent sales tax

on gross sales?

HON. MR. DAVIS : It's a royalty;

that's the terminology in the industry. But in simplistic terms it's

akin to a sales tax, which is a simple percentage figure applied to the

gross value of sales at a certain point — in this case, at the

wellhead. So it is a sales tax, yes.

Sections 1 to 5 inclusive approved.

Title approved.

HON. MR. DAVIS : Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 30, Petroleum and Natural Gas Amendment Act, 1988, reported complete without amendment, read a third time and passed.

[ Page 4697 ]

HON. MR. STRACHAN : Committee of Supply, Mr. Speaker.

The House in Committee of Supply; Mr. De Jong in the chair.

ESTIMATES: MINISTRY OF

TRANSPORTATION AND HIGHWAYS

(continued)

On vote 67: minister's office, $280,361.

MR. LOVICK :

Mr. Chairman, when we left off last time in the debate, I had posed one

question that the minister took on notice. I thought perhaps it would

be wise to clean up what we'll call unfinished business before we go

any further. So perhaps the minister would like to respond to that.

HON. MR. ROGERS :

Yes. Last year, actually, the office of the minister was somewhat

underfunded, and there were some efforts made to address that. There

was an underfunding of about $7,000. In addition to that, the 10

percent executive benefits plan had previously been paid by the

Provincial Secretary ministry, and it's now more correctly and

accurately reflected in the expenditures for the minister's office —

plus, there has been a general increase in the salary of all ministers.

I think if you peruse the spending estimates of ministers' offices,

there has been an increase in a number of ministries. That's why this

was done last year. Last year we had underfunded one whole position in

the ministry, and the person working in the office was in fact being

paid by the ministry. It perhaps more correctly reflects the genuine

cost of operating the minister's office, which is actuarially correct,

and one of the things I asked the staff to do when we came there.

Secondly,

yesterday you talked briefly about Coquihalla 3, and I know you will

want to mention it some more. When the spending limits were imposed by

Treasury Board on this particular highway project, the cost was put at

a ceiling of $225 million in 1987 dollars for project completion —

depending on some conditions — in 1991.

There are 84

kilometres of road between Peachland and Aspen Grove, 54 kilometres of

which will be four-laned. All of the adverse gradients will be

four-laned so that we don't run into the difficulty of having to cut

and fill above or below the existing gradient. There will be 21

kilometres of two-lane, and 11 kilometres of three-lane which has been

recently upgraded from two-lane. Any place where the highway is in

relatively level condition, it will be a two-lane road, and where there

is traffic congestion caused by slower vehicles, of course we move into

a three-lane thing.

The entire highway will be built to

high-speed traffic standards and posted at a 100-kilometre speed limit

which, even at the most optimistic of estimates, will adequately handle

our traffic flow requirements for the next 15 years. It also completes

the tourism route for people who choose to go up the Hope-Princeton

Highway and come back through the Okanagan or, for that matter, to go

up around Salmon Arm and come back down the Trans-Canada Highway. The

one we would see being more widely used is the Hope-Princeton and the

Coquihalla 3.

We looked at where the savings would be.

having constructed certain areas of sub grade. Essentially we came to

the conclusion that where 80 percent of the work had been done, it

should be completed, and where less than that had been done. we could

go to a two-lane configuration which would accommodate our requirements

from Treasury Board to stay within $225 million. To build a four-lane

sub grade at this time would cost about $8 million additional dollars.

To justify making that expenditure 15 years in advance of the time when

you require that as a minimum is just not actuarially sound. We don't

believe that we have left any engineering problems, so that when you

run into an engineering problem.... We are not going to be running into

it; we are just postponing some expenditures.

Mr. Chairman,

I believe those are the two items that I discussed with the member

yesterday and perhaps we could get into other items as well.

[11:45]

MR. LOVICK : I want to thank the minister very much for that detailed answer. I appreciate an answer to both of those questions.

Coquihalla 3, precisely because it is a detailed question and answer. I

am going to reserve comment to later in the estimates when I will come

prepared with some opinions and arguments suggesting that another

approach is required. I nevertheless do want to emphasize that I

appreciate that answer and thank the minister for it.

When

I left off yesterday, I was providing simply an overview of the kinds

of questions I wanted to pose under the heading of Highways estimates.

I had not gotten too far with that. I am not going to touch on all of

the things I intend to cover. I don't think the House would be served

by that. I want to pick up on a couple of points though. because they

are very much current and alive. They are matters I have raised earlier

in the House. and therefore it seems appropriate to touch on those

briefly now. Even though I didn't give the minister any advance

warning, I'm sure he will appreciate this as a legitimate approach.

The

first thing I want to touch on briefly is the Redman case. As we have

all now heard, Mr. Redman has been reinstated retroactively, despite

the fact that when I posed the question in the House some weeks ago on

May 11, the Premier informed the House that Mr. Redman was indeed

terminated "justifiably."

The questions that still remain

concern the reasons for that firing. I recognize that there are

personnel matters that don't belong in this public forum, but given the

problems that we have heard about in terms of morale and given what has

been refer-red to as the shake-up in the ministry, I think it's fair

for us to ask a couple of questions and to ask for some assurances. I

would therefore ask the minister if he would care to comment in

response to a couple of questions.

For instance, is the

minister prepared to assure us that Mr. Redman's dismissal had nothing

whatsoever to do with his voicing of concerns and apprehensions about

the privatization of highways maintenance? That is certainly the

perception in Kelowna and of highways workers everywhere. and I think

for the benefit of morale — if nothing else — the minister might want

to give us that assurance. Perhaps I'll ask that direct question first.

HON. MR. ROGERS :

I'll back up a little bit and tell you a little wise word about the

Coquihalla 3. Needless to say, all of the contractors who have done

work on this project and want to continue to do work on the project

have very wonderful arguments as to why the thing should proceed in

[ Page 4698 ]

the

way that it has done in the past. They would even like us to have the

same kinds of disciplines that we've had in the past, and that's just

not in the cards at present.

As I told you, or told.... I

don't believe you addressed the question to me in the House, so I will

just back up a bit; I told reporters who had asked me the question that

the administration of personnel within the ministry is an

administrative function dealt with by the deputy minister. The decision

on Mr. Redman's case, and on any case, is one that I have no knowledge

of. I was not consulted, I was not asked, and I don't expect to be

asked. Not only do I not expect to be asked as to who should be hired,

I don't expect to be asked as to who should be terminated and under

what circumstances. There are fairly rigid guidelines put out by the

division of government that looks after the hiring and dismissal of

employees.

I believe the matter has been dealt with. I have

spoken to the deputy minister who deals with personnel matters where

this reinstatement in fact took place, but neither instruction came

from me. If you ask me to make a statement about what people can and

can't say, again, that's not an administrative function of this

ministry; that's an administrative function looked after by the

minister responsible for the government employees bureau.

Needless

to say, I have given no instruction that employees who are critical of

the minister or of the minister's action should be dismissed. If I had

given such instructions in the past, there might have been a long trail

of people dismissed from government, because not everybody in all the

ministries I have had were totally thrilled with all the decisions we

made. But we get elected by the public to make those decisions.

Interjection.

HON. MR. ROGERS : Well, just in this one particular case.

can't give you assurances of what basis.... I wasn't privy to knowing

under what basis the gentleman was dismissed or on what basis the

gentleman was rehired. I believe in retrospect, and after examination

by staff people — not by political people, but by staff people — that

the matter was not handled in an appropriate manner. Nonetheless, no

instructions were given by me to dismiss him.

I think that

managers have a certain role and responsibility that requires them to

handle and conduct themselves in a manner which is pretty clearly laid

out for them. I don't set that policy and I don't enforce that policy;

that's an administrative function in the ministry.

I've

never met the gentleman in question. I didn't suggest that he be

dismissed, I didn't suggest that he be rehired, nor do I give direction

or criticism as to where he should go. I think that answers the

question you put to me.

MR. LOVICK : That perhaps

answers the question to your satisfaction, Mr. Minister, but I must

confess not entirely to mine; the reason, I think, is fair and

certainly worthy of airing.

You can indeed, Mr. Minister,

disclaim responsibility for personnel matters and say, "I did not have

a specific involvement in this; managers should be left to

manage," and all those others things we all learn in MBA courses.

Fine. There's a considerably good case to be made about that; I accept

the premise. The problem, however, with this case is that it's gone

rather beyond that textbook stage, that theoretical stage. We're

talking about somebody who, we recall, went public. The papers picked

it up; television picked it up. A whole bunch of people in the ministry

are now saying: "Is it the case that if I go and privately talk to my

superiors about an initiative of government that, in my professional

judgment, based on my experience, I conclude is wrong, my job will be

in jeopardy?" Of course, it's complicated further by the fact that, as

we know — and I'm delighted to see one of the members for Okanagan

South here — that same individual had a conference with his elected

representatives.

The question also arises inevitably and, I

think, quite fairly as to whether it is the case that, because of

taking either of those approaches — either talking to his superiors in

camera about reservations or to his elected representatives -that

activity, that occurrence, had anything to do with his dismissal,

albeit a temporary one. The problem, of course.... What that does is

that those questions raise the whole issue of free speech. They raise

the whole issue of whether in fact we are indeed imposing some kind of

gag order; whether the ministry's power is being used, albeit not by

the minister, in some kind of coercive way to extract and guarantee

silence from employees about what is, after all, a very sensitive issue

throughout this province — namely, privatization of Highways

maintenance operations-

I think, then, with all due

respect, that the minister does have a necessary obligation to at least

provide assurances that as long as he is the minister, that kind of

policy will not be tolerated, and any deputy who tries to do that kind

of thing.... I recognize this is all merely allegation; we don't know.

But as I say, I think the minister has an obligation to provide us with

assurances that that kind of behaviour and treatment of Highways

employees will not be tolerated. Would the minister care to respond?

HON. MR. ROGERS : I've never had the privilege of attending an MBA course, so I'm not sure that it's not just....

Interjection.

HON. MR. ROGERS : I never had the time to go. I was busy carrying people back and forth.

terms of this particular issue and the dismissal and rehiring of this

employee, I would like you to consider that the standard has to be the

same for all government employees, not just those of the Ministry of

Transportation and Highways. So the standards that are set down by the

ministry responsible for the government employees' relations is the one

that has to make those standards. I'm not going to impose a specific

set of rules for employees of my ministry as to what they can or can't

say. Those are a standard set of rules for all government employees.

can tell you that about eight months ago my television set broke down,

and I've had the wisdom not to have it repaired, so I haven't seen any

of these great stories that you have. I would recommend that to all

members. Your life is much happier. A whole day without watching the

news is a pleasant day, and sometimes if you stretch it into a week

you'll feel better, sleep longer and be more productive in the work you

do. Nothing will really have changed very much over the weekend, and

you can get back and do the chores you have to.

I believe that all ministry employees of all the ministries should be treated with the same set of guidelines. I don't

[ Page 4699 ]

believe we should impose a special restriction or special loosening of the rules for employees of this ministry.

You

asked me to give you assurances; I think those assurances should be

asked for of the minister responsible for all government employees. We

have no special circumstances in this ministry. I have not asked for

them; it's the farthest thing from my mind. It's not a matter of

consideration. The rules that are there are consistent, because the

issue of privatization will inevitably affect most if not all of the

ministries of government. Therefore most if not all of the ministries

of government will have employees that will want to speak out on this

issue, and therefore we should have standard rules for everybody. I

think that — not to your satisfaction, but at least to my satisfaction

— answers the question.

MR. LOVICK : I'm glad to see that the minister has psychic powers, because he knows clearly that that is not answered to my satisfaction.

The

minister can say that the way to solve your problem is not to watch

television or some such thing, We all know that line; it's called

ignorance is bliss and enjoy while one can. However, it begs the

question, and with all due deference, I think the rest of the answer

also begs the question. To say that we have to have specific standards

and those must be universal and fairly applied across all ministries is

fine; nobody disputes that. I don't think that that has a heck of a lot

to do with the case I'm making.

The case we are making is

that it has been alleged in a number of different forms by a number of

different people that what has happened here is that an individual's

right to free speech.... Privately expressed opinions — not having gone

public with those opinions — and opinions that are in opposition or at

for dismissal — that's the allegation. It seems to me that that is a

damning allegation and that any cabinet minister ought to want to make

sure that that kind of behaviour does not go on. If I should conclude

from the minister's answer that really what I should do if I'm

concerned is ask somebody else — namely, the Premier as somebody who is

apparently responsible for all ministries — fine, I will accept it. But

I think the minister also has an obligation to say that he wants to get

assurances from his own deputy that it was not a privately expressed

disagreement with policy — privately expressed, I emphasize — that was

the grounds for dismissal of that employee. Surely that is not asking

too much of the minister. Will he not ask his deputy for that assurance?

HON. MR. ROGERS :

You pose a little different question when you bring in the issue of the

deputy minister and what relation he has had with this particular

employee. I could ask him for that assurance; that I can certainly do.

But there are also other matters surrounding this particular case which

are currently being discussed in another forum, which I don't

particularly find myself wanting to get involved in one way or the

other. I think it should go through its due process, and there is due

process that's there. If there is a personality issue or another issue

involved, there is a proper forum for that to follow its full course.

There may be disciplinary issues. There may be legal issues that come

before us in this case. There may be a numbe

Well, it's moot now, anyways. They've just announced a Finance meeting for

tomorrow, so I'll be at work. The problem for me is that this stretch of working

just about every day at Hansard comes with only a half-hour lunch.

What do you think about next Tuesday, instead? I'm off that day, and I

could come and meet you downtown for lunch, someplace close to where you work?

You name the time and place, and I'll be there.

Bill

r of issues. But I'll certainly get an answer to your

question on that issue when I see the deputy. He is not here today; I'm

joined by Mr. Hogg and Mr. Collins from the ministry, in case there are

technical questions they can assist me with.

MR. LOVICK :

I thank the minister for that. I think it's an important step forward,

and I think it's absolutely necessary that we separate those other

personnel matters and possible reasons for dismissal or reprimand or

expression of dissatisfaction with an employee's performance from the

one I'm referring to, which is a mere expression of disagreement with

the policy.

Embedded in my question is an assumption, and I

acknowledge the assumption: that as long as those opinions or

disagreements are expressed privately, they should indeed be allowed;

moreover, they should be encouraged. The usual rule of thumb for civil

servants to work within a given ministry is that you can disagree in

private. The issue is: will you have difficulty carrying out the

ministry's policies? If a civil servant has no difficulty carrying out

those policies, then she or he ought to be able to carry that private

disagreement without any difficulty whatsoever. I'm sure the minister

would agree with that. I think that's the civilized approach to public

service that's been around for a very long time in this country, and

one I hope would obtain and continue.

[12:00]

Unless

the minister feels an absolute need to leap up, let me turn to another

matter that has also very recently come to light. I'm referring

specifically to the news release issued by the Minister of

Transportation and Highways dated May 26, headlined "Privatization

Progress."

What I really want to do is to pose a couple of

questions about this. The lead for this press release and the thrust of

the story seems to be that privatization is proceeding swimmingly and

the minister is especially delighted by the fact that employee groups

have leapt into the fray and are playing out their allotted parts so

happily. I'm obviously overstating the case. but I think it's fair to

say that the thrust of the release is that yes indeed, all these

employee groups are on side, and there are some — what? — 12 in total

that are now in the process of making application.

I don't

object to the minister's saying anything like that. Obviously it's a

right to give the press release that kind of thrust. The problem I have

with this — I'm happy to see my colleague the member for Esquimalt-Port

Renfrew (Mr. Sihota) here too, because I'm sure he has a similar

problem — is that this particular approach to the press release does

not seem to be entirely consistent with recent history concerning

employee groups' applications to take over the operation of a

particular region of highway maintenance operations. Of course, I'm

referring specifically now to region 1, southern Island.

The

perception of southern Island employees with whom I've had some

contact, from whom I've received a certain amount of correspondence, is

that they did what they were called upon to do; they were rejected;

they made an appeal for further explanation concerning what they had to

do to satisfy all the requirements; they were again rejected, as they

tell me, without satisfactory or adequate explanation. They therefore

conclude, Mr. Minister, that — to borrow a phrase — they have been led

down the proverbial garden path, and that the whole process of an

employee group making application was merely a sham; it had no chance

whatsoever of success. That is the sense that these employees have

given to me and to others. They are saying: "As far as we can make out,

we did what we should have; we spent the time and the

[ Page 4700 ]

money;

we got the appropriate expertise; we answered the questions; we dealt

with the objections presented to us by the privatization group staff;

we did everything we should have; but we still came a cropper. We

didn't get accepted." They are indignant, angry and certainly

disillusioned, and they feel they have been betrayed.

Rather

than my belabouring that point any further for the moment, perhaps the

minister would like to respond to just what I've said thus far.

MR. R. FRASER :

With the permission of the committee, I would like to add a little

phrase or a paragraph to that question from my hon. colleague opposite.

My part of the question is that apart from the fact that employees have

been disappointed from time to time, I understand there is a suggestion

by Mr. Shields that union groups have been pressured into making bids,

and I would like the minister to tell the House whether or not any

pressure whatsoever has been applied to union groups, as expressed by

Mr. Shields.

HON. MR. ROGERS : A very detailed

submission was sent to employees of the ministry affected by this

initiative. Some of those employees felt the issue would go away and

that the government was not serious about its concern. Others chose not

to be involved with it. Others chose to go through a prequalification

process; some were successful and some were not. They were put through

a standard set of tests, and many of them failed to meet the basic

criteria set down to prequalify for these particular operations. I had

a look at some of them. In some cases the employee groups were acting

as a front for a construction consortium, or acting in concert with a

construction consortium who would have taken advantage of the employee

discount that's available, but which the employees themselves had not

prepared for. Looking at it from my point of view, there is a

remarkable difference between the submissions of prequalified employee

groups in the different areas of the province. An extended effort was

made to go back to them, to point out what the shortfalls were and

where they had failed to meet those requirements. I forwarded to your

office some time ago the rather detailed prequalification package so

that you were aware of it and had the opportunity to look at it.

The

difficulty is that in many of these cases the employees got together

and had a meeting and, I think, left it to somebody else to follow

through with it. I'm not sure. I've talked to a number of employees who

asked me to come and speak to them privately just to give them some

basic assurances as to why the program is going ahead and how we think

it will work, and I've left the matter at that. There are areas of the

province, quite frankly, where the employees aren't the slightest bit

interested. Whether or not that is as a result of coercion or pressure,

or maybe just a personal choice, they have to make a commitment if they

wish to be their own employers in this particular case, and some of

them choose not to do that.

I think the prequalification

process has been done well and fairly. I think some felt that the whole

issue...that if they just leave well enough alone, it'll go away. I

don't think some of them were convinced of our depth of conviction on

this process. I haven't had any correspondence from employee groups who

felt they had prequalified and been unjustly treated; but as in any

process when there's more than one bidder on a particular project,

there will be someone who spent time preparing a bid and has not been

successful in winning the contract.

We think we have gone

an extra mile in trying to qualify and assist these people. In many

cases staff gave quite a bit of extra time to employee groups to make

sure they had the documentation in order to prequalify. While some may

be disappointed, I don't think there has been any suggestion — at least

none that's come to my office — that there has been a difference in the

way people have been treated in this issue.

MR. LOVICK :

I want to emphasize the point that for the present I am referring only

to contract area one. Perhaps a little later in the game, when I can do

some investigation of other areas, we can have a look to find out what

employee groups are saying there, and I can respond then. For the

moment, though, my focus is on contract area one.

I'm

pleased to hear the minister say the privatization task force and other

officials have given lots of their time to help these groups; and I

have had, as he said, an opportunity to refer to the materials

provided. That's all to the ministry's credit on the face of it. The

point, though, is that some kind of training program was given — seven

weeks, I believe — and the employee group had an opportunity to review

those manuals in terms of how to put their specifications together.

They did all that. They were rejected, and when they wrote for an

explanation in writing, including specific reasons why they were

disqualified, they got, unfortunately, a very simple statement that

their proposal was found to be deficient in the areas of financing and

management capability; whereupon they attempted to provide answers to

those questions and, I gather, felt — again based on their testimony —

they did not get any further sufficient detailed explanation of why

their bid failed. It's precisely that chain of events that calls into

question the entire process.

If in fact the ministry is

selling this privatization program on the basis of opportunities for

workers to become owners and they have indeed set aside a considerable

amount of ministry staff and money to help these employees, isn't it

then fair to ask why specifically this particular bid did not get

accepted? The employees still do not feel they have had an adequate

answer to that question.

HON. MR. ROGERS : The

privatization working group works out of another ministry, and I had

not brought the staff people along to get the details of the number of

meetings. If we'd like to go on to other questions, I could have them

here for Monday. Given the time now, I don't think it would be possible

to get somebody here.

I do know that their representatives

were given a long and detailed explanation, and several meetings took

place between people from the privatization working group and

representatives of the employees. It may have been that the employees

were not prepared to accept the reasons given to them, as opposed to

the fact that the reasons were not given to them.

We have

lots of other issues to discuss in the estimates, and I had not

anticipated that this would be coming along and would be a particular

question. If you'd like to go on to another issue now while I have

staff here, I can assure you that if we can agree on 2:30 Monday, when

I believe we'll be doing these estimates again, I can have someone here

from the group who can specifically answer those questions. If you want

to spend a little time on them and if you give me some warning, I can

get the staff.... As I say, these people don't work out of my ministry;

they are actually the responsibility of the Minister of Energy, Mines

and Petroleum Resources,

[ Page 4701 ]

So we're answering questions that affect my ministry but are dealt with by someone else.

MR. LOVICK :

I thank the minister for that answer and appreciate the fact that this

matter is being raised without much in the way of warning. I don't

intend to violate the rules that we set up in the beginning in terms of

working from common ground. We will leave it then, Mr. Minister. I

would prefer not to defer it specifically to Monday. Instead, I'll deal

with it as part of a larger package and will certainly keep you advised

about that.

My colleague from Esquimalt-Port Renfrew wants

to make a very brief reference to that area, given that it's within his

constituency. The reason I'm standing up now is that I was given a note

and asked if I would make an introduction. If the House would give me

leave, I'd like to make an introduction.

Leave granted.

MR. LOVICK :

My colleague our House Leader, the member for Coquitlam-Moody (Mr.

Rose), is not here and has asked me to extend his greetings to a class

of students — about 60 grades 10 and 11 students from the College de

Levis en Quebec. Bienvenue aux etudiants. Nous sommes heureux a faire

votre connaissance ici aujourd'hui. I didn't realize they were from

Quebec until I read this. In any event, I would ask the House to please

join me in welcoming those students.

MR. SIHOTA : I can hardly wait till we get some students from the Punjab here so I can speak in Punjabi. I wonder how Hansard would handle that.

want to deal with the matter of privatization just in a general sense.

I have some specific questions on the privatization of that area but

will wait until a later opportunity.

Suffice it to say to

the minister that I've been down to that work yard on Jacklin Road on

several occasions and in Sooke as well. I'll tell you, there are a lot

of guys down there who don't know what's going to happen to them in the

future. Quite often in the politics of privatization, we tend to

overlook the fact that there are people whose livelihoods depend on

these decisions. There are a lot of people down there who are hung in

suspension; they don't know what's going to happen tomorrow. They don't

know if they're going to have any work tomorrow. They don't know if

they should go out and acquire things for their families. They're

working under a tremendous amount of stress because of the indecision

around privatization. That stress is showing in what's happening both

on the worksite and with their individual families.

[12:15]

particular, 17 employees who work at the fabrication shop have been

told over the last few months that they're going to be gone, then that

they're going to stay, then that they're going to be gone. One time

they were told they were going to be gone in March, and here we are in

May and they're still here. Then they were told that they might not be

gone, and they breathed a collective sigh of relief. Now they're told

that they're going to be gone.

I'm telling the minister

that there are lives involved here. I've got a couple of people down

there who have flipped out, who have taken time off since October in

stress leave, and other people who have opted for the retirement

package as a way of getting around the intolerable situation down on

Jacklin Road. I can't speak enough for the human dimension to this

privatization problem, which I can say often gets overlooked in the

confines of this chamber. I've spent a fair bit of time down there, and

it's not a healthy situation at all. It's not particularly healthy for

those people who work at the fabrication shop — there are 17 people

there.

I want to know from the minister what the government's intentions are with respect to that fabrication shop.

HON. MR. ROGERS :

The employees of the fabrication shop know the status — at least, they

have been advised. Eventually they will be laid off, because we will

see an end to the requirement for the product that they produce.

You

talk about the anxiety of the employees. We've done a pretty good job

of communicating with them as to what the program is — I think an

excellent job, quite frankly. They have had some contradictory stuff

sent to them by other people. But in view of the fact that we wanted to

have the employee groups themselves considered, we had to allow a much

longer time-frame for the privatization group than if we had made the

decision that the employees wouldn't have an option on this thing and

we'd just go right out to tender with it. They would now be working for

have working for government. But we wanted to allow them to have that

option themselves. In some cases they have chosen not to take that

option; in some cases they have chosen to try it and have failed; in

other cases they have been successful in finding the funds and the

wherewithal to go ahead and do it.

So there has been a

longer period of time in this privatization process than would have

taken place under normal commercial circumstances because we wanted to

go out of our way to do the correct thing for the employees. In some

cases misleading information is being given to them by a number of

different people. I think the information we have sent them has been

quite specific and detailed. I expect that the majority of the

employees who are currently working for us in highway maintenance will

be working for a private contractor where a private contractor takes

over that particular area, or will be working for themselves where they

take over that area.

In terms of the fabrication shop,

there are some products that have been produced by the fabrication shop

on and off basis, some of which we will be phasing out. Some of the

products produced in the fabrication shop are somewhat unique, and

perhaps the employees may go with the particular fabrication if that is

to go ahead. I will get you further detail on that.

MR. SIHOTA :

I take issue with the minister when he says that the communication has

been excellent. I don't think that's the case. In fact, the only

official we've ever had down there is myself. I've gone there and

talked to them, and they are always asking me what's going on. Believe

you me, I'm not trying to pass on — and I don't think you were saying

this.... It's not me who's trying to pass on any misleading

information. It is a very, very tense situation and they are getting

mixed signals. The communication is less than excellent, and they are

desirous of meeting with anybody from the minister's political party

who will explain to them what the government's agenda is. Since it's

not that far away, I would encourage the minister to come with me

sometime to that fabrication shop or that work yard and have a chat

with the chaps down there. I think he would quickly find out that what

people are telling him is happening with respect to communication is

not the case.

[ Page 4702 ]

want to go back to the fabrication shop. The minister talks about

additional information in this regard. People down there tell me about

the economics of that fabrication shop: how it makes sense to have one

centralized unit in the province doing all of that type of work; how it

makes sense to maintain at one site the collective experiences built up

over the years at that shop; how it doesn't make sense to contract out

individual components of that work. I'd like the minister, if he's

going to provide some information to this House — whether today or

later on in these estimates — to tell me whether or not he has in his

possession any cost-benefit analysis to demonstrate that it would be in

the best interests of the taxpayer to break up the specialized

fabrication shop unit that we have now at Langford. Does that kind of

information exist? I hear the minister saying he will get it for me,

and I'd like to see that tabled in the House.

HON. MR. ROGERS :

On a cost-benefit analysis basis, we could change a whole host of

things in government, I could give you lots of cost-benefit analysis to

show you that certain things we do in ministries in government have no

cost benefit at all. But when it comes to metal fabrication and

fabrication of specialty products for the highway maintenance

operation, I have some difficulty following the argument, which I'm

sure is put forward very eloquently by the employees, that they have

some pool of expertise so specialized that it couldn't be done

elsewhere. But I will get that information for you.

MR. SIHOTA :

Thank you. I would like to receive any background information that the

minister has in this regard. Certainly, to be very honest about it,

I'll share it with the employees. It's not just a simple metal

fabrication shop. It's a highly specialized function which few, if any,

people are involved in.

I want to ask the minister this

question; if it has been asked before, I apologize, because I wasn't

here. With respect to region one, first of all, and secondly in general

terms, how is the ministry handling the issue of liability with respect

to its privatization initiatives? Has that been asked?

HON. MR. ROGERS :

No, but your colleague has a complete set of that detailed information

which we gave to the employee and contractor groups. If you want me to

duplicate the work I've given to the critic, I can do that. It seems to

me that this ministry is relatively complex and the issues are complex,

and where there is background information that I can provide to your

caucus, I would only provide it to the one member it might be most

pertinent to.

MR. SIHOTA : There's another issue that

I want to canvass with the minister in terms of region one, again

specifically with respect to the people at the Jacklin Road site. I

found it astounding to learn when I talked to them most recently that a

number of what I would call somewhat strange things are happening.

First of all, there have been days when there has been little or no

work for them to do, on the pretext that things have to be delayed in

light of the privatization initiative. I can tell the minister that for

two days all the workers down there were told simply to wash vehicles;

that was all they had to do, because there was no requirement that they

do anything else, and they wanted all the vehicles to be clean for the

people that were coming for the viewing on privatization. On another

occasion, all the staff was told that its job for the day was to go out

and pick up garbage at the side of the road, again because of the

indecision over privatization. On another occasion they were told that

the usual process of securing purchase orders to buy equipment was now

replaced and that they could not go out and buy more than $500 worth of

material. I believe they could not buy any hot-sealing equipment to do

patchwork on roads. There were limitations on the amount of material

they could buy and what they could buy, to the point that a lot of

routine maintenance work could not be performed.

We have

people who are washing trucks all day long, who are told not to do

anything but pick up garbage for a day, and who are told that their

ability to buy supplies and goods is severely limited to the point that

they can't perform regular maintenance work. That's what the employees

tell me is happening on the site. I have no reason to doubt them. I am

wondering if the minister can comment on what I say in that regard.

HON. MR. ROGERS :

I used to work for a very large federal Crown corporation. At the level

I worked — which is very close to the level, I guess, of what you're

talking about — we used to hear all sorts of wonderful things. I

eventually got to meet the president of the company and check out some

of these wonderful stories that I heard and found completely different

answers for the reasons that those decisions had been made. I can't

give you an explanation as to why a particular foreman or district has

decided to do a particular type of work. It certainly isn't something

that has come out of a privatization policy.

I will tell

you that we've tightened up very severely on regional purchases in that

we have reduced the amount of money they can spend without getting

permission from someone higher up. It's had some remarkable effect. We

would find that near the end of the fiscal year there would be quite

substantial expenditures on a whole host of things just to make sure we

spent all the money that was in our budget. Every expenditure that came

to Victoria for approval was approved; however, many of the regional

managers decided not to submit things to headquarters for approval just

because they gave it the second thought that it needed.

don't believe we've ever been in the situation where they haven't been

able to get the equipment that they needed to do the job. I also know

we've been in a position where they haven't been able to spend money

that they have traditionally spent near the end of the fiscal year just

so we would spend all the money allocated by this Legislature. We just

wanted to see that that kind of efficiency takes place. That's a normal

kind of efficiency, and in the post-Coquihalla period this ministry

cried out for it.

MR. LOVICK : The privatization

issue is, of course, large and complex. As I said to the minister the

other day, we're going to save that issue for a much fuller canvass.

Interestingly enough, in the minister's comments when he introduced his

estimates, the comments on privatization were the most terse of all,

because he obviously knew that there would be lots of opportunity for

that discussion and felt he didn't need to.

I want to turn

to the whole matter of B.C. Ferries as, by arrangement.... I assume

that the minister recalls that it is what I said we were going to turn

to next. If I might, Mr. Chairman, I will just begin by again offering

a very brief outline of the things I intend to do.

[ Page 4703 ]

I want

to start by focusing on the overall policy governing the operation of

B.C. Ferries. I want to touch a little more specifically on the matter

of subsidy and just what the real arguments for and against subsidy

happen to be. Then I want to move to a series of very specific

questions about B.C. Ferries — not specific ferry routes and schedules,

but specific system wide questions. Then I want to end by posing a

number of specific questions on specific routes. I don't expect, Mr.

Minister, that we'll get very far on all of this today. That's an

overview, if you like.

Let me begin by offering a couple of

comments about the whole large area of ferry operation. It seems to me

that if I had to describe the approach by government to the operation

and management of the B.C. Ferry Corporation, the word that I would

come up with would probably be "erratic." It seems to be an on-again,

off-again approach to things; less delicately put, some might say

flip-flop.

By way of illustration, let me offer just a

couple of things. Early in 1988, there was an announcement suggesting

there would probably be no expansion of the fleet's capacity. Six weeks

later, however, we had an announcement suggesting that a fairly major

building program would be undertaken, namely a new vessel a year, and

on and on. I know that's overstated, and the minister qualified that

somewhat earlier. The point is, the erratic quality nevertheless was

there. What happened was that we had one policy at one point; six weeks

later we apparently had another. These are policies to govern the total

operation of the thing.

Another example, of course, in more

recent time was the business about selling liquor on the ferries. That

was all t rage for a little while, perhaps before your time, Mr.

Minister. But then that also seemed to have disappeared. On wonders if

perhaps the policy governing might be the mod I perfected by the

Premier, which is to test the winds and see which way they're blowing;

in other words, to make announcements on a kind of "adhocratic" basis,

as the spirit moves one: find out what the public opinion polls say,

find out what's happening, then react and respond accordingly. I hope

that's not the case, but one can be forgiven, I am sure, for suggesting

that is perhaps the case.

[12:30]

Apropos

of vehicle expansion, I might ask a very specific question. The

minister pointed in his opening remarks with some satisfaction to what

I think he called "phenomenal growth of demand on the ferry routes" —

primarily routes I and 2, of course. He pointed to some figures and

percentages which I can, of course, quote.

Concluding,

however, from that evidence of phenomenal growth that there was a case

for a major expansion of capacity, the question that has been posed by

a couple of people who have analyzed the data is whether that trend in

growth really represents any observable trend that we can count on for

the next ten years, or whether it's part of the five-year cycle that

we've had before. Certainly, we have seen this in the plateau that was

reached, so the argument goes, between 1980 and 1985 and stopped in '85

effectively.

The talk about adding extra capacity to the

fleet seems to be based on the assumption that there will be a

long-term trend of increased demand. I'm wondering if the minister can

provide us with information to show us that there has been some kind of

projection to demonstrate that we will have to make major investments

in increasing the capacity. I'll just ask that specific question first.

HON. MR. ROGERS :

One Crown corporation that certainly has a lot of details and does a

lot of projections and knows precisely what its load capacity is and

what we're doing is B.C. Ferries. Yesterday I had the honour to attend

a luncheon given for those employees that have 25 years service or

more. Statistics were given out to me about what had happened 25 years

before when we carried 3 million vehicles, and in the ensuing 25 years

where we now carry 14 million vehicles. The growth continues.

There

are a number of factors involved. I want to go back to your first thing

about options, from an operations point of view. I don't foresee an

operational increase in frequency; I just see an increase in capacity.

We are referring now to routes 1 and 2, because you should almost

divide the Ferry Corporation into routes I and 2, the lesser island

ferries and the northern services.

In terms of liquor on the ferries, that's the very same thing. I know we serve alcohol on the Queen of the North , which has a 12-hour run. I believe the Queen of Prince Rupert ,

which goes to Skidegate, is an 8-hour run and also has bar service on

it, although I can't be positive about that. But those are the only two

that I have known of, in the time that I've been in this government,

for which we ever considered whether or not alcohol should be made

available. When the CPR ran a ferry from Nanaimo to Vancouver they had

a bit of a pub on the back of it. Perhaps they had the argument they

went from downtown to downtown and the walk-ons were entitled to have a

drink. I don't see any pressure, and I haven't had any requests for it.

What

we want to do is put more children's rooms on these vessels. All the

European ferries have a children's playroom on the ferry. They're very

much more of a family-type operation. They want more shopping space and

they want more video games. That's what the public asked for.

MR. LOVICK : Routes 1 and 2.

HON. MR. ROGERS : Yes, that's routes 1 and 2, and perhaps on the Queen of the North

as well, or any vessel that we may put on to replace that. It's got to

be more of a liner type operation. It's a liner-type operation now, but

if you're going to compete with the market that's out there.... Right

now we don't need to compete, because we're sailing virtually at

capacity. In fact, we're loath to advertise that route, because we

can't handle the people during the time of the year that they'd like to

travel.

On routes 1 and 2, we see continued growth. An

interesting phenomenon is the decrease in the amount of warehousing

that's done on this Island. Warehousing used to be done on Vancouver

Island. Trucks would bring goods to the Island, or in some cases they

would come by rail; they'd be warehoused and distributed from the

Island. The economics of the size of vehicles and delivery times and

handling costs have meant that there has been a decrease in the amount

of warehousing done on the Island. Some of the growth that we see in

the commercial traffic has really been as a result of a change in the

economic structure of the distribution of goods, rather than a choice

of how things are moved that way.

In terms of long-term

projections, and figuring into '86 what Expo did to us, I'm absolutely

convinced that B.C. Ferry Corporation's projections, day by day and

month by month.... They have kept very good detailed things. We know

where the bottlenecks are. We know where the expected growth is coming.

We can also pick where the peaks and valleys are. The problem is not

the frequency of service; the problem is the uplift capacity of the

vessels during those times when we have regular sailings.

[ Page 4704 ]

you want to go back and talk about some historical things, and talk

about flip-flops, I guess I could take you back to a time when Mr.

Strachan was the minister responsible for the B.C. Ferry Corporation.

I'm not referring to the member from....

Interjection,

HON. MR. ROGERS : He had several things.

decision was made by a previous government to build a class of vessel

that was designed to serve what's called a short link. They had the

courage to design the vessel, and we have five of them in service now,

but they really are not the correct vessel to use on that route. There

was a decision to construct the vessels without the decision to make

the corresponding capital and infrastructure investment, bridging to

Gabriola Island and putting in a terminal which would be terribly

controversial wherever it was put on the mainland side. While that

might give us a 45-minute crossing and a whole bunch of attendant

benefits to the central part of Vancouver Island — Nanaimo likes to

consider itself the centre; I think perhaps Campbell River is closer to

the centre, but Frank Ney would spank me if he heard me calling the Hub

City anything but the centre of the Island — that would very much

adversely change how we go.

There have been some changes. We're making do with the best that we have.

terms of routes I and 2, as we begin to see it.... I'm going to see it

this afternoon, and you're going to see it for the rest of the summer:

weekend traffic, peak traffic. Interestingly enough, we've tried

putting on late-night trips. It will work for a rock concert, but

that's a different kind of market. Believe it or not, they're very

subdued when they come home, because it's too late. We've tried those

kinds of things. What we have to do is try and accommodate the people

by having that uplift. They can handle the 7 o'clock and 9 o'clock

sailings in the morning, and handle the evening sailings, the 5 and 7,

and even as much as the 9 o'clock sailings on those main routes.

It's

not urgent that we get on with this job. I'd like to stress that. We

have the capacity now. We have some vessels laid up; we can cut them

into service. That's not a problem. We certainly have the crews,

although some of our skippers who are getting close to retirement age

are going to be moving on, and we're going to start seeing our own