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

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 11, 1999

Afternoon

Volume 15, Number 3

[ Page 12429 ]

The House met at 2:08 p.m.

I. Chong: Earlier today all members of this Legislature were invited to a lunch that was hosted by the Certified General Accountants Association of British Columbia. Many of us who attended enjoyed that lunch, I think, as well as a very insightful presentation. Now it's my pleasure to introduce some members of the board of the CGA Association. Attending are Mr. John Nagy, FCGA president of CGAA-BC, and Mr. Jay Norton, past president. Also in attendance are some staff members: Bill Caulfield, our executive director; Edward Downing, communications director; and Kathy Hurst, director of member services.

Accompanying Mr. Norton is his son Shannon. I would ask the House to please make them very welcome.

Hon. M. Farnworth: I have two introductions to make today. We have some distinguished guests in the gallery. Visiting the House today are some members of the Independent Order of Oddfellows who are having their annual convention here in Victoria. They are the Honourable Connie "Mac" Riley, sovereign grand master of the sovereign grand lodge of the Independent Order of Odd Fellows from Nebraska; Dino Fiorin; Yvonne Isenor; Annie Laurel Cassell; and William Scott, grand master of the grand lodge of British Columbia. Accompanying them is a constituent of mine, Preben Kent-Nielson. Would the House please make them welcome.

We also have a 12-member delegation from Sweden in the members' gallery. The delegates are senior non-political directors from Sweden's newly formed four regions representing southern Sweden, including two directors from the national level. They are here to study regional development in British Columbia, and they will be travelling to the Premier's Summit on Economic Opportunity in the Cariboo-Chilcotin. Would the House please make them welcome.

[1410]

Hon. P. Priddy: There are two people with us in the gallery today . . .

Interjections.

The Speaker: Order, members.

Hon. P. Priddy: . . . to help us celebrate Nursing Week. They are Dr. Deborah Northrup, who's an assistant professor of nursing at the University of Victoria and the education research representative of the greater Victoria

chapter of RNABC -- the Registered Nurses Association of B.C. -- and Roseanne Black, who is a nurse and regional coordinator for the RNABC for Victoria, Saltspring and Duncan. I would ask the House to please make them welcome.

C. Hansen: The College of Family Physicians of Canada is holding its annual scientific assembly here in Victoria, starting tomorrow. One of the delegates is Dr. Barbara Gallagher, with her husband Peter from Melbourne, Australia. I just want to assure the Gallaghers that their son-in-law is a very capable and efficient member of the official opposition caucus staff. I hope the House will make them welcome to Victoria.

S. Hawkins: In the Legislature today is Senator M. G. Pandithan from Malaysia, the chair of the International Dalit Organization, as well as Mr. V. Panjamurti, the general secretary of the organization. I was invited to a seminar in Vancouver last night where he was presenting. Unfortunately, I couldn't go, but I understand it was very successful. He was there to help raise awareness of the plight of those known as untouchables in India and to assist in gaining social and human rights for this group. The official opposition extends a very warm welcome to Senator Pandithan and to the general secretary and the delegation that's here.

Hon. M. Sihota: In keeping with the introduction made by my colleague from the Okanagan, I'd like to give our warm regards from this side of the House to the Senator and the general secretary, both of whom have been introduced. Joining them, as well, is a member visiting from Calgary, Mr. Mesharam, as well as a number of members from British Columbia: Mr. Bill Basra, Mr. Raminder Bhuller, Mr. Ramesh Owan, Mr. Bhag Singh Lanji, Mr. Satwinder Bandhan, Mr. Satwinder Rahul, Mr. Darshan Kherha, Mr. Malkiat Rai Sohpaul, Mr. Sita Ram Ahir of the CRD youth association in Surrey, and Ms. Seema Ahluwalia of Kwantlen College. Will members please give them a warm welcome.

Hon. U. Dosanjh: I want to add my welcome to the members of the International Dalit Organization. Many of them are my friends, and I've known them for a long time. They work hard in the community to achieve equality for all of us. Would the House please make them welcome once again.

Hon. I. Waddell: It takes real genius to create a TV show to reflect British Columbia to other Canadians and get the CBC to show it nationally. I have the honour to introduce to the House such a genius: Chris Haddock, the producer of "Da Vinci's Inquest." With him is the chair of B.C. Film -- and the chair of my working group on film and TV -- Mr. Michael Francis. Will the House please make them both welcome.

Hon. D. Streifel: On behalf my special assistant, Chloe Burgess, I'd like to introduce Angela, Jim and Faye Burgess and Esther Sayer to the House. They're visiting the precincts today from near and far. I bid the House make them welcome.

Hon. J. Kwan: It is with pleasure that I introduce Mr. Eugene Oscapella, one of the founders of the Canadian Foundation for Drug Policy, whose aim and mandate is to educate and promote drug policies that would save lives and stop the spread of diseases amongst drug users. Would the House please make him welcome.

[1415]

J. Doyle: I have four guests in the gallery today. Sonny and Agnes Nomland are friends from Kimberley who now reside in Victoria. With Sonny and Agnes are a friend, Gwen Williams, and a special guest, John Stanton. John was a lawyer trying to get rights for working men and women in mines

[ Page 12430 ]

back in 1939-40. He has worked and dedicated his life to making life better for working men and women. Make these people welcome, hon. Speaker.

Introduction of Bills

PENSION BENEFITS STANDARDS AMENDMENT ACT, 1999

Hon. D. Lovick presented a message from His Honour the Lieutenant-Governor: a bill intituled Pension Benefits Standards Amendment Act, 1999.

Hon. D. Lovick: I move that the bill accompanying the message be introduced and read a first time now.

Motion approved.

Hon. D. Lovick: Hon. members in the House, I am sure, may be aware that the Pension Benefits Standards Act, which governs conditions in employment pension plans, came into effect in 1993 and received minor amendments in 1994 and 1997. Amendments to this act are now required to achieve the following: enhance protection of B.C. pension plan members and pension funds; reduce costs and red tape; increase flexibility for employers and employees; provide consistency within the act and with income tax -- i.e., federal legislation; and provide the superintendent of pensions with the tools to enforce the provisions of the act.

These amendments demonstrate government's commitment to increasing flexibility and protecting the interests of the pension plan members, while reducing red tape. They provide new enforcement and prudency rules, increased disclosure and flexibility, and other provisions to generally increase member access and protection. Portability of pension benefits will be increased in several ways, providing flexibility for members and relieving employers of the administrative burden of those funds. Hon. Speaker, I therefore move that this bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 58 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

JOB PROSPECTS IN FOREST INDUSTRY

G. Abbott: This government has stated that the forest industry is facing a wave of good news. The Forests minister has even proclaimed that there's going to be a turnaround in the industry. Can the Forests minister tell the hard-hit forest communities of British Columbia how many jobs his government is going to create in 1999?

Hon. D. Zirnhelt: The investments, we think, will total some $658 million. I'm not sure how many jobs that will create. But we've said that in these difficult times, we are lucky to maintain the employment. I'm happy to report that the survey of employment and payroll hours, which we quote here all the time, indicated that in February we lost no jobs.

G. Campbell: Hon. Speaker, the opposition has obtained a leaked document from senior government officials that points out the lie that the government is trying to propagate across the province -- that the forest sector is on a rebound.

The Speaker: I beg your pardon, member.

Interjections.

The Speaker: Member, take your seat, please.

I recognize the Minister of Energy and Mines.

Interjection.

The Speaker: We don't take points of order -- you're quite right about that.

Hon. D. Miller: Well, neither, then, Madam Speaker, should people disobey the rules of the House.

The Speaker: All right. We'll have a discussion about this later.

The Leader of the Official Opposition knows the rules of the chamber about language.

G. Campbell: According to this leaked report of senior officials, some 10,500 forest sector workers can expect to lose their jobs in 1999, and 7,500 people are expected to lose their jobs in the year 2000. That's more than 18,000 people who will be out of work as a result of this government's overtaxation and overregulation.

My question to the Minister of Forests is: why hasn't he been honest with people in forest-dependent communities, people who depend on forestry for their jobs, and pointed out that they could lose up to 18,000 jobs in the next two years?

[1420]

Hon. D. Zirnhelt: That was fearmongering by the industry itself. If we did nothing, there would be a loss of jobs, they predicted. That's if we did nothing. Hon. Speaker, we responded. We progressively reduced the administrative burden, and we reduced the stumpage system -- the general tax that they pay on trees -- to the tune of $1 billion. I'm happy to report that year over year there has been no job loss, and that's documented by Statistics Canada.

The Speaker: First supplementary, Leader of the Official Opposition.

G. Campbell: Hon. Speaker, this report was prepared by senior government officials. It says: "Many mills operating in British Columbia are in crisis, not just the ones that are permanently or temporarily closed." It goes on to report that in the year 2000 "direct employment in the British Columbia forest industry is forecast to be . . . down 9 percent from 1998 and 14 percent from the 1996 levels . . . . " My question, again, to the minister is: why hasn't the minister told forest workers that his own officials are secretly predicting that 18,000 people will lose their jobs in the next two years?

Hon. D. Zirnhelt: This is the opposition that said there would be 15,000 jobs lost last year. But guess what: it was zero.

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The Speaker: Second supplementary, Leader of the Official Opposition.

G. Campbell: The incredible thing is that this Forests minister doesn't seem to understand the damage that has been done in people's lives as a result of his government's forest policies. Let me quote again from these senior government officials. The truth is, hon.

Speaker, that the document says this: "A simulation of the impact the estimated job losses might have on unemployment levels in each regional district shows the forest industry crisis spreading to almost every . . . forest-dependent community in the province." The document goes on to say: " . . . some inefficient mills must close in order to return the industry to profitability . . . . " This government's tax and regulation has made a number of mills inefficient, hon. Speaker, as I know that you know.

So my question to the minister is: which inefficient mills does the ministry think must close before a return of the industry to profitability?

Hon. D. Zirnhelt: It's not for this minister or this government to decide which mills should be closed in the province. Industry itself predicted . . . .

Interjections.

Hon. D. Zirnhelt: You should listen. Industry itself predicted a number of closures if we were to do nothing. We did something. In fact, we reduced . . .

Interjections.

The Speaker: Order, order!

Hon. D. Zirnhelt: . . . the costs of doing business in British Columbia by $1 billion, and that's now showing up on improved profit pictures for the industry. They are on a restoration of profitability, and it's that opposition that is putting the fear into people when they have no basis for the fear.

G. Plant: The document is a document prepared by senior officials in this government for presentation to the federal government in Ottawa. On every page of this document we read the details, and the words used are "crisis," "devastation" and "disaster" in the forest industry of British Columbia. Apparently the government of British Columbia is prepared to tell the truth to the government in Ottawa, when it insists on hiding the truth from the people of British Columbia. My question for the minister is: why doesn't he stand up now and admit that his government's own officials have acknowledged that the results of his government's policies are crisis, devastation and disaster?

[1425]

Hon. D. Miller: It is a bit much sometimes, listening to the line of questioning of the members opposite. They are now saying how strongly they feel about job loss in the forest sector and which mills are going to shut down, when that Leader of the Opposition and that gang over there said to every resident of northwestern British Columbia -- 7,000 direct and indirect jobs: "If we were in power, we would shut you down." The biggest job-killer, hon. Speaker . . . . If this gang of bandits ever got to power, watch out, those people in forest-dependent communities, because that Leader of the Opposition would be there to shut you down.

The Speaker: First supplementary, member for Richmond-Steveston.

G. Plant: Imagine this, hon. Speaker: after eight years in government, a Deputy Premier stands up in a room full of forest workers and describes his own government's policies as soviet-style. Every day some master of the NDP spin machine stands up and says: "Oh, roses just around the corner; happy news just ahead." Well, the fact is that this document makes it clear that this year and next year . . .

Interjections.

The Speaker: Order, order!

G. Plant: . . . there will be 18,000 more jobs . . .

Interjection.

The Speaker: Minister, minister.

G. Plant: . . . lost in the forest sector.

Interjection.

The Speaker: Minister, enough!

G. Plant: So my question . . .

Interjection.

The Speaker: Minister . . . .

G. Plant: . . . for the Deputy Premier is: will he stand up and say how many mills is it that will have to shut because of his government's incompetent overregulation of the forest industry?

Hon. D. Miller: I will note, hon. Speaker, that when I was speaking to the Northern Forest Products Association and took a risk by raising some controversial issues which were embraced by the industry leaders present, I do recall the courageous comments of the Liberal Forests critic, who said: "Oh, I don't know what we'd do."

Interjections.

The Speaker: Order, members.

G. Farrell-Collins: Well, I'm sure that the forest sector around the province was relieved to hear that this government had some alternative to the last eight years of Stalin-like management of the forest industry in British Columbia and the thousands of job losses. The government's own document -- which it appears that members of cabinet didn't get a chance to see, but we'll be glad to provide them with copies -- from early this year says that 4,500 direct forest jobs were lost last year. That's what the document says. It says that during the same period, forest industry employment in other Cana-

[ Page 12432 ]

dian provinces increased by 4,300 in Alberta, 8,200 in Ontario and -- wait for it -- 11,000 in Quebec. Does the Minister of Forests, who has presided over this downturn in the forest sector year after year, have any explanation for his incompetence in managing the forest sector in this province, to finally answer the people of this province who are losing their jobs as a result of it?

Interjections.

The Speaker: Order, members.

Hon. D. Miller: Hon. Speaker, you know, the empty rhetoric from the opposite side . . .

Interjections.

The Speaker: Members, members. The minister has been recognized -- to provide an answer.

Hon. D. Miller: . . . does not do justice to the forestry issues we face here in British Columbia. Hon. Speaker, the members opposite . . . . I note, hon. Speaker, that the Forests critic has been removed from even asking questions about forestry, which speaks volumes. The members opposite know, particularly on the coast of British Columbia, that the Asian market is the market for forestry. They know we have been exposed on that. Hon. Speaker, I can say that on this side of the House we have nothing to apologize for in putting together . . .

Interjections.

The Speaker: Members, members.

[1430]

Hon. D. Miller: . . . the case for forestry and forest-dependent communities in this province and going to the federal government and saying: "You have a role to play in assisting through these difficult times." Instead of deriding that initiative, perhaps people in forest-dependent communities might like it better if the opposition . . .

The Speaker: Thank you, minister.

Hon. D. Miller: . . . occasionally supported them instead of doing this fearmongering day after day after day.

Interjections.

The Speaker: Order, members.

First supplementary, member for Vancouver-Little Mountain.

Interjections.

The Speaker: Order, members!

G. Farrell-Collins: What the people in forest-dependent communities would like to know is that when the ministers of the Crown stand up, they tell them what's actually happening, they tell them the truth, they get the news, and they know what they're dealing with. Hon. Speaker, this document is not even two months old -- 4,800 jobs lost last year, and it's only going to get worse. The document says again, and I quote . . . .

Interjection.

The Speaker: Minister . . . .

G. Farrell-Collins: I will be glad to give copies of the document to members of cabinet, particularly the A team, which apparently has been totally asleep at the switch as far as it deals with the forest sector. This document says: "While the British Columbia forest industry is in crisis, the forest sector in other Canadian provinces has seen its lumber production and total forest industry employment increase" -- dramatically.

Does the minister responsible for the devastation in B.C. forests . . . ? Will he finally stand up and tell the people of this province what he's done to the forest sector and how bad it's actually going to get before it gets better?

Hon. D. Zirnhelt: We have said that we will rely on the statistics from Statistics Canada, and they report, year over year . . . . There's been zero job loss. What is happening in the forest industry is that some of the larger mills that are inefficient are shutting down and being replaced aggressively with jobs in the value-added sector. We have said to the federal government: "Come and assist us in replacing those jobs.

Come and assist us in replacing those jobs in the primary industry by retraining people, by investing in silviculture and by assisting those communities that have to go through transition." We have said that we have policy on this side to the tune of $22 million to assist in the preparation of jobs . . .

The Speaker: Thank you, minister.

Hon. D. Zirnhelt: . . . in the value-added strategy, and those jobs will replace the lost ones. We do something about it; you just talk about it.

C. Clark: The Deputy Premier is wrong. He does owe an apology. He and the Premier and this government and this Forests minister owe an apology to all those workers and all those forest-dependent communities, because the Premier . . . . It wasn't long ago that the Premier paraded through every one of those communities and promised them 22,000 new jobs. They owe those people an apology, because we've seen in this document that there are 11,000 jobs already lost and 18,000 more jobs to go. That's 29,000 jobs down the drain.

Will the Forests minister stand up today and apologize to all those people and admit that the Premier, when he was parading through their communities promising them new jobs, was making fraudulent promise . . .

The Speaker: Thank you, member.

C. Clark: . . . after fraudulent promise?

Hon. D. Zirnhelt: Hon. Speaker, it has always been clear that the restoration of employment in the forest sector will happen when the markets pick up. The reason that there are jobs . . . . The reason there is an expansion of industry in other parts of the country is because they're moving into areas that they haven't cut. That's happening in British Columbia, as I've explained. We've just seen a $283 million investment plan for the creation of 500 jobs in northern British Columbia. Why?

[ Page 12433 ]

Because there's wood to cut. I have to tell the opposition to read the statistics on what happened last year. There was zero job loss. In previous years there has been some job loss, and we are dealing with it by a community transition strategy that's designed to replace those jobs. If that opposition would support those strategies . . .

[1435]

The Speaker: Thank you, minister.

Hon. D. Zirnhelt: . . . maybe the confidence would come back.

Ministerial Statement

NATIONAL NURSING WEEK

Hon. P. Priddy: It gives me great pleasure today, as Minister of Health and as someone who is a former nurse, to take this opportunity during National Nursing Week to recognize the incredible achievements and dedication of B.C.'s nurses and to express appreciation for the tremendous contribution that nurses make in so many different ways to the health of British Columbians.

Day in and day out in this province, nurses perform an array of demanding roles and responsibilities, often carried out, as we all know, under the most challenging of circumstances and with the competence and caring and compassion that have earned them the respect of all of us who've come under their care -- and that's just about everybody.

The role of nurses has always been varied, but it is becoming even more so, as nurses face increasing opportunities and challenges. Whether caring for frail grandparents in extended-care homes or frightened children in emergency rooms, whether supporting new babies and moms at home or assisting complex surgeries, nurses are indeed the heart of our health care system.

This year, in honour and support of the United Nations International Year of Older Persons, the Canadian Nurses Association has chosen as its theme "Older Persons and Nurses -- Partners for Healthy Aging." Nurses play a vital role in the health of older persons. I congratulate the Canadian Nurses Association on using National Nursing Week as an opportunity to focus on educating Canadians about the health issues of older people and on providing older people with practical information to promote healthy living.

As Health minister, I've talked to many people about our health care system, and I've heard very often that it's by the quality of the nursing care that people receive that people judge their overall health care experience. I'm proud to say that the recognized high quality of nursing care in this province helps create positive experiences from what are very often very difficult circumstances. During National Nursing Week, it's important that we take time to recognize that fact.

That's why I'm now taking this opportunity -- I hope on everyone's behalf -- to let nurses know how much we value them as individuals, how integral they are to our health system and how much we care about nursing and the future of nursing in our province.

I know that the nurses of this province are well aware that our appreciation of them and their profession extends well beyond Nursing Week, but I am delighted to stand up today during Nursing Week to express publicly the gratitude of this government and all British Columbians for nurses' dedication and achievements on behalf of us all.

C. Hansen: I'd like to join the Minister of Health in saluting the work that nurses do in our province and the tremendous dedication that we see from all who have been part of that profession in years gone by. Certainly I think anybody that has had any contact with health care in this province -- whether in a hospital, in the community or in the public school system -- stands in awe of the work that is done by nurses throughout British Columbia.

Nurses have some very real challenges in the year ahead, and as a society, we have some real challenges. Certainly, if we look at the potential for shortages of nurses in the future, we have to do everything possible to encourage those in the profession to make sure that their jobs are rewarding and fulfilling and that we give young British Columbians more opportunities to pursue this career in the future. So I would certainly like to join with the minister in saluting the nursing profession and wishing them every success in their continued progress.

Petitions

D. Jarvis: On behalf of our member for Delta North, who is unable to be here today, I'd like to present a petition from a group of his constituents with regard to opposition to the actions of ICBC management in contracting out a furniture contract to Alberta.

Hon. D. Lovick: I too wish to present a petition, if I may.

The Speaker: Yes.

Hon. D. Lovick: This is signed by 36 members of my constituency who wish to go on record as protesting the aerial spraying in British Columbia.

Orders of the Day

Hon. D. Lovick: I call Committee of Supply. In this chamber, we will be debating the estimates of the Ministry of Energy and Mines and Ministry Responsible for Northern Development. In the other committee, Committee A, we will be debating the estimates of the Ministry of Agriculture and Food.

[1440]

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

ESTIMATES: MINISTRY OF ENERGY AND MINES AND

MINISTRY RESPONSIBLE FOR NORTHERN DEVELOPMENT

(continued)

On vote 25: ministry operations, $35,483,000 (continued).

The Chair: Just before we start with committee, members, the Hansard recording people would like me to suggest that you allow a pause after being recognized, before you speak. Otherwise, your first few words are lost to the recording.

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Hon. D. Miller: It wouldn't be the first time that the first few words of some of my speeches have been lost -- mostly on the crowd, particularly the crowd opposite.

K. Krueger: The minister made what, on the face of it, sounded like a very good-news announcement yesterday at the commencement of these estimates, with regard to a deal that has been made on the Highland Valley Copper situation with B.C. Hydro, concerning hydroelectricity rates. While the minister expressed a need for some confidentiality on a commercial arrangement, I'm sure he understands that there has been tremendous stress on families in Logan Lake, Kamloops, Ashcroft, Merritt and Cache Creek.

Some 1,046 people were directly employed by Highland Valley as of the date of the layoff announcements and the press release by the mine on January 18, '99. Some 100 of those jobs have now apparently been lost forever -- which, of course, has tremendous ramifications for those communities and the families that were involved.

[1445]

Whenever the government or anyone else is able to announce the creation of even a handful of new jobs, it's considered very good news by all of us. It's certainly covered in press releases by government and so on. To have lost 100 jobs is a real tragedy for the regional economy. Nevertheless, if the balance will be rescued by the government making the appropriate moves and the union and the mine finding themselves able to resolve their differences in collective bargaining, then there's going to be a tremendous sigh of relief throughout the region -- throughout my constituency and the constituencies of the member for Yale-Lillooet and the member for Kamloops.

And respecting that need for confidentiality on a commercial arrangement, I would ask the minister if he would nevertheless offer some further detail, some clarification to the people of our region who have been so tremendously concerned. I received 31 letters from employees of a single supplier to Highland Valley Copper, for example. They're desperately concerned about their futures and the future of their families and the way closure could affect them.

Would the minister be willing to give us a little more commentary, a little more detail -- to flesh out the bones of that agreement a little?

Hon. D. Miller: No, and I can say that I don't think the comments made by the member publicly have helped to try to resolve the issue. I think they've hindered that. I only wish that the member who displays such compassion for people in the regions and their employment would try to devote just even a tiny piece of his mind to developing the same compassion for the people who live in northwestern B.C., and get off the silly position he's taken with respect to Skeena Cellulose.

K. Krueger: Well, of course, that isn't the answer that I was hoping for -- nor the people that I represent, nor the people that the members for Kamloops and Yale-Lillooet represent.

The minister made a comment in the House yesterday about a column of mine in the local media and said that if you replaced the words "Highland Valley Copper" with "Skeena Cellulose," my request would mirror what he actually did at Skeena Cellulose. Since he raised that issue as well, I'd point out that Highland Valley was never looking for subsidies. Highland Valley was never looking for the government to purchase part of its operation. There were no banks about to foreclose on Highland Valley. The government hasn't been left holding the bag for Highland Valley. It's a totally different situation.

But what the column did point out was that the layoff notices were issued in January -- that's pursuant to this government's employment standards legislation -- and that by the time the column was published, dozens of jobs were already gone, and they'll never be back. Those jobs aren't going to be filled.

It made the point that Highland Valley Copper's payroll and the payrolls of companies dependent on the mine for their viability, together with the business incomes that Highland Valley Copper provides those suppliers, and the spinoff effects throughout the region, make up at least 25 percent of the local economy -- an $80 million payroll a year; $36 million a year in B.C. Hydro fees; approximately half a billion dollars a year to the economy of British Columbia, most of it in our region; and something that probably is the basis for at least 3,000 jobs in our region.

The column went on to say that if we lose that, our region will not make it up for many years. Property values will fall. Other businesses will collapse and shrink. Children and neighbours of my constituents will have great difficulty finding jobs in our region. Many will become longer-term unemployed or be forced to leave the area. Highland Valley's closure will be an economic disaster, manufactured by the NDP.

Interjections.

K. Krueger: As I speak, hon. Chair, you're not seeing fit to silence the member from Prince George, who is supposed to represent children and families, apparently oblivious to the fact that hundreds and hundreds of children in Kamloops are dependent on the food bank to get through each month because of the economy . . .

Interjections.

K. Krueger: . . . being created by this government. So I would ask that the Chair silence the member for Prince George - Mount Robson -- she should take some responsibility for what this government has wrought in our economy.

[1450]

Going back to the minister's commentary about the column that I wrote, it went on to point out that the Leader of the Official Opposition and I stood up in this House in January, upon issuance of the layoff notices, and called for an emergency debate. And this government said, of all things, that the situation did not meet the test of urgency. Indeed, that's the way the government has conducted itself ever since -- as if this wasn't an urgent situation.

The column went on to say the solutions are obvious: tax relief and a cut in B.C. Hydro rates are required. It is the NDP who have raised these costs so high that B.C. industry cannot be competitive. They can drop the cost. In fact, B.C. Liberals have located two American customers, Intalco and Longview Fiber, who are buying electricity from B.C. Hydro for half the price which Highland Valley is being charged. That is ridiculous and shameful.

The column summed up: "In fact, if the NDP would reverse the huge costs it has imposed on the mine and other

[ Page 12435 ]

B.C. industries, the pressure would be off the union and Highland Valley, enabling them to properly conduct their collective bargaining." So if the minister was saying yesterday in the House, as he did, that you take the words "Highland Valley" out and put in "Skeena Cellulose" instead, then clearly he's accepting that his government's actions directly led to the Skeena Cellulose problems. That is something we've also said all along.

It's this government's disastrous policies of overtaxation, overregulation and total interference in relations between companies and their employees that has put the forest industry in the box that it's been in -- put it in the crisis where it finds itself -- and taken it from the lowest-cost producer of wood fibre in the world to the highest-cost producer and positioned our B.C. forest industry so that it could not withstand market cycles that were perfectly predictable and predicted by that industry.

So yes, if that was a mea culpa by the minister yesterday that in fact his government is responsible for the situation that the people of the northwest and the forest industry there find themselves in, I agree with him. We accept that guilty plea, because in fact it is this government that has created the problems that the entire economy of British Columbia is mired in. Skeena Cellulose was an early victim of that, and mines across British Columbia and other forest operations across British Columbia are victims of that. Now the housing construction industry and industries of many types across the spectrum are victims of those stupid and flawed approaches.

The minister has said no, he's not willing to give more commentary. Having taken this crisis at Highland Valley Copper to the eleventh hour, having refused to treat it as an urgent situation, having in fact argued to the Speaker that it didn't meet the test of urgency, now this minister blithely announces some sort of deal yesterday that he's not going to give any details of. He's going to leave the mine and the union to try and resolve the issues in the couple of days that are left.

I remind the hon. minister that this mine is scheduled to close this week, and the layoff notices are in effect. Having taken things to that point, now the minister says no, he's not going to bother giving any detail. Maybe the minister would care to explain to us why he waited so long. This solution was perfectly obvious to everyone.

The mine has been talking to the official opposition and to the government for years about the fact that this government's gouging on B.C. hydro rates was making them uncompetitive and that they were getting closer and closer, as copper prices fell to the borderline, to where they would have to have relief or they would be closing. Why did the minister wait until yesterday to finally deal with this situation?

Hon. D. Miller: In the immortal words of Pierre Trudeau in the House of Commons, I'm almost tempted to advise the member to close his sphincter, because, really, that's what we're dealing with.

An Hon. Member: Hey, hey, hey! That's absolutely unacceptable, Mr. Minister, and I would ask . . . .

Interjections.

The Chair: Members . . . . The member for Peace River North on a point of order.

R. Neufeld: I know that tempers run a little far, and people can get stretched to the end a little bit. But that kind of language, hon. Chair -- and you heard that kind of language clearly, as well as I did -- is not acceptable in this House, and the Deputy Premier of the province of British Columbia should know better than that. I would ask him to withdraw that comment immediately.

The Chair: Minister, withdraw the comment.

Hon. D. Miller: I'm happy to withdraw the comment.

The Chair: Thank you, minister. Just before you begin, minister, I would like to remind all members that so far in this debate, since we've started this committee, there has been language that is not parliamentary on both sides of the House. I would suggest that we all reflect on our tempers and the moderation and the characteristics of our language as we proceed.

[1455]

Hon. D.

Miller: I can only remark in some befuddlement and puzzlement on how a member opposite can stand up and pour out the drivel that he has and can argue -- as he did, standing here in this House some months ago -- and say we need an emergency debate in this parliament, right now, today, because Highland Valley may or may not be shutting down two months from now, and how in the face of the potential loss of 7,000 jobs in northwestern B.C., in communities in Smithers and Hazelton and Terrace and Prince Rupert, which is far more cataclysmic in terms of its impact, the member opposite takes the position that they should shut those companies down.

How can you possibly have that much empathy and sympathy for people in one part of the province and be so cold-hearted and ignorant about the situation in the northwest part of the province? You examine yourself on that, Mr. Member.

The Chair: Through the Chair, please, members.

K. Krueger: I'm reminding the minister of what he said in response in question period yesterday. The quote is that if we took the words "Highland Valley Copper" out of my newspaper column and inserted the words "Skeena Cellulose," the column reflected exactly what the NDP did at Skeena Cellulose. So let's do that, in which case this column in the summation would read as follows:

"The solutions are obvious: tax relief and a cut in B.C. Hydro rates are required. It is the NDP who have raised these costs so high that B.C. industry" -- Skeena Cellulose -- "cannot be competitive. They can drop the costs . . . . In fact, if the NDP would reverse the huge costs it has imposed on the mine" -- mill -- "and other B.C. industries" -- Skeena Cellulose -- "the pressure would be off the union and Highland Valley, enabling them to properly conduct their collective bargaining."

So I agree with the minister when he said that you could substitute the words "Skeena Cellulose" for the words "Highland Valley Copper," and this column would directly reflect what happened to Skeena Cellulose. In other words, the minister was accepting responsibility for the debacle that his government has created in the northwest -- in Prince Rupert, in Smithers, in Houston, in Hazelton, in Telkwa and all through that area.

People are in desperate times. Small contractors were tricked into supporting Repap B.C. before it pulled out, having run its debt up to the maximum -- tricked into supporting

[ Page 12436 ]

them, working for free all winter, only to be told in the spring that Repap was closing its hand, putting the cards down on the table, walking out of B.C. and leaving British Columbians holding the bag. That's what happened.

Sure enough, the minister stood in the House yesterday and said: "Put Skeena Cellulose in that column instead of Highland Valley Copper, and that's what the NDP did." He's right, hon. Chair. I'm kind of shocked that he would have said it, but that is exactly what he said.

Now the minister has stepped out of the House for a while. Who knows if he's coming back? It'd be better for us if he never did. It'd be better if this government walked out of the House . . .

The Chair: Order, member.

K. Krueger: . . . and never came back.

The Chair: Order, member. Member, perhaps I could ask, if you're willing to contribute to the debate, that we move on and that you ask a question relative to the estimates.

K. Krueger: Until there is somebody here to answer my question, I'll extend the question. I want to look at the government's pronouncement about this alleged deal that was published yesterday and ask the minister why we have some contradictory comments about who's making the deal and what it's about. Obviously he's not going to be able to answer the question until he's here. Since he isn't, my question will continue for a little while. Hopefully, he's listening somewhere, although it seems doubtful to me.

Highland Valley Copper announced . . . .

The Chair: Excuse me, member, would you take your seat, please?

The Attorney General on a point of order.

Hon. U. Dosanjh: I understand that one of the rules of the House is that members are not to comment on the absence of other members from this House.

The Chair: That's quite correct.

R. Neufeld: Point of order also, Mr. Chair. I mean, it's obvious that the minister who was here to answer the questions has left the House during questioning. I don't think it's unnatural for the member for Kamloops-North Thompson to ask: "Who do I ask the question to?" Is the deputy minister going to answer the questions? Is the Attorney General going to answer the questions?

The Chair: Member, if you could take your . . . .

R. Neufeld: They're the ones in the House.

The Chair: Thank you, member. Take your seat, please.

R. Neufeld: Who is going to answer the questions? The minister has run out again, like he usually does. This is not untypical of this minister.

The Chair: Thank you, member. It's quite within reason for the member to ask the question and wait for the answer.

[1500]

K. Krueger: Now that the minister is back in the House, I'll do just that. I'm sorry that the Attorney General is big on rules and so short on results, but that fits with the rest of his caucus.

Before he walked out, the minister expressed what he called befuddlement and puzzlement. Again, that's a pretty frank admission from a tough guy such as himself -- befuddlement and puzzlement. It's been pretty obvious in the economic results in British Columbia all through the 1990s, a decade that should have belonged to British Columbia but instead belonged to the NDP. Look at the ruin it's brought. The minister has said . . . .

The Chair: Member, could you take your seat, please. I'm going to remind members once again that using language that is suitable for this parliament requires good temper and moderation. I find unsuitable language which is of a personal nature within these estimates.

K. Krueger: I hope it isn't offending the Chair if I quote the minister, because the minister certainly wasn't reproached for saying he was befuddled and puzzled.

The Chair: Member, could you take your seat, please? Maybe you need time to consider what I just said a few minutes ago.

K. Krueger: The minister said that he knows business better than the banks. The government press release says that the job protection commissioner has developed a power pricing structure that will allow Highland Valley Copper to benefit from this program,

whereas other government information released yesterday suggests that this deal was arranged through the Power for Jobs scheme. Could the minister please clarify for the House which it is?

Hon. D. Miller: The press statement I put out yesterday is very clear.

K. Krueger: Well, the press statement says that the job protection commissioner has developed a power pricing structure. Is the minister saying, then, that this has nothing to do with the Power for Jobs scheme?

Hon. D. Miller: I'd be happy to send the member another copy, if he hasn't read it thoroughly.

K. Krueger: Well, I have read it.

Referring to another government press release -- this one dated May 27, 1998, when the Premier was running around our region talking about creating a Power for Jobs scheme which would potentially result in a mine-life extension at Highland Valley Copper to 2012 and indeed the development of a copper refinery at the Highland Valley Copper mine -- the Premier is quoted as saying: "The government's Power for Jobs initiative provides for the negotiation of competitively priced power for a new investment project." And the Minister of Transportation and Highways, the MLA for Yale-Lillooet, said: "These joint industry-government initiatives are part of the B.C. government's overall strategy to draw job-creating

[ Page 12437 ]

investment to the province, along with Power for Jobs, the oil and gas initiative and other programs under the Jobs for B.C. strategy."

The press release went on to say: "The plant would create 500 person-years of construction employment, 110 full-time jobs, plus protect existing jobs representing an investment of $200 million. With the extension of mine-life to the year 2012, investment would be nearly half a billion dollars and would support more than 1,200 potential jobs." Wow! People in Kamloops just thought that that sounded too good to be true, and of course it was, like all of the job creation announcements from this government.

That was supposed to have been a Power for Jobs deal. I'd like to ask the minister: what went off the rails? Why did that never materialize? Why was it necessary to bring in the job protection commissioner? And why, then, is the minister saying that it was the job protection commissioner who managed to put this deal through and that it has nothing apparently to do with Power for Jobs?

[1505]

Hearing no answer, I guess I have to conclude that the minister doesn't know and that it's part of the befuddlement and puzzlement.

People from around the province are asking, and I think it's a legitimate question: since this is obviously an answer to the crisis that this government has placed British Columbia's industries in through its overtaxation, overregulation, gouging and B.C. Hydro rates, why not cut the power for all British Columbians, for all rate-payers, residential as well as commercial -- for all B.C. industries? It's a precious, renewable resource.

The infrastructure was put in place by a competent government before these people ever came to power. The water is flowing over the dams; we're having to spill water to lower the reservoirs to try and prevent the flooding risk. The water just keeps falling out of the sky. Thank the good Lord that he put that in place for us, because we've sure needed his help in the last ten years. Water keeps coming; the power is generated; it belongs to British Columbians. Why not cut the rates for all of B.C.'s industries, for all of B.C.'s mines and mills, for all of B.C.'s ratepayers?

Why not give the authority back to the B.C. Utilities Commission and tell them that the power ought to be made available to British Columbians at cost? If we can just lower the cost of inputs in British Columbia, we can cut taxes and power rates, perhaps we can get investors creating jobs again; perhaps we can create the environment where private sector investment will create employment in British Columbia again. So perhaps the minister would answer the question: why not cut the power rates for all British Columbians and all B.C. industries?

Hon. D. Miller: As was pointed out before lunch, the power rates in B.C. have been frozen since 1993. We had an extensive discussion, and I think a productive discussion, with the two critics, and we acknowledged to each other that B.C. Hydro is not within my portfolio. But notwithstanding that, we had a brief and, I thought, productive discussion around the issue of power rates, the marketplace and those kinds of things. I don't think that we have to recanvass that, and quite frankly, it's not within the purview of my estimates.

K. Krueger: It was the minister who introduced the issue of power rates yesterday with regard to the alleged agreement with Highland Valley Copper. In a B.C. Hydro backgrounder issued December 17, 1998, this is said: "In the year ended March 31, 1998, B.C. Hydro's net income hit an all-time high of $440 million, in spite of the depressed state of the province's resource industries. B.C. Hydro's recently released financial results for the period March 31 to September 30, 1998 show that this year should be even more profitable."

Mr. John Sheehan, in his civil action against this government, was quoted as saying, in a meeting between B.C. Hydro's senior managers, that essentially B.C. Hydro had been gouging B.C.'s industrial users and intended to continue doing that, and that he certainly didn't want that to become common knowledge outside that room. Of course, he changed his mind once he had some personal motivation to allow it outside that room. But the fact is that -- and again, it's fairly common knowledge -- this government skims about one-third right off the top for itself.

The Chair: The minister on a point of order.

Hon. D. Miller: Mr. Chairman, I am not the minister responsible for B.C. Hydro. The member is wasting valuable time, during which the critics and I could have a much more productive discussion.

The Chair: Thank you. I was waiting to see if the member was going to relate his remarks to the estimates. It seems that your remarks are probably better directed to the Minister of Employment and Investment.

K. Krueger: I think I will wrap up this line of questioning, since the answers are so unproductive. But, once more, I would make the point to the minister and give him one last opportunity to answer a question.

There are thousands of people in Kamloops, Logan Lake, Merritt, Ashcroft and Cache Creek -- people whose families have been on pins and needles for months, people who have seen this crisis coming on for years and employees whose union has now been left in the position of having two days to try and salvage the situation with Highland Valley Copper. These people have not been well served. I think the minister could show the courtesy to those people, to our region, of at least offering what detail and hope he can with regard to the crisis that this government placed Highland Valley Copper in and what was agreed to yesterday.

Hon. D. Miller: I'm happy to report that both I, as the Minister of Energy and Mines, and the two other area MLAs, the Minister of Highways and the Minister of Environment, have been working extremely hard over the last couple of months on the Highland Valley issue -- ever since the company first announced that because of low copper prices, they were going to have to shut down unless they could reach an agreement on a power deal and reach agreements with their employees and other suppliers. We are working very, very hard.

[1510]

I was very pleased that the culmination of one portion of that very hard work was the agreement between Highland Valley and the government with respect to a power agreement. It's a critical piece of putting together an economic plan to try to maintain the jobs at Highland Valley Copper.

I was extremely disappointed -- as, I understand, are a number of the constituents of the member who just spoke --

[ Page 12438 ]

in that in all of this time, when we were working away and having meetings with the company and with other people . . . . During all of this period, the member whose constituency it's in and who has, in vocal terms, expressed all this support and shed crocodile tears . . . . Not once during that two-month period -- not once -- did that member inquire of my office, of B.C. Hydro, of Cominco, I think, or of any responsible agency that was dealing with the issue.

Not once during that two-month period did that member over there even bother to get off his backside and go talk to the people who were working so hard to solve the problem. Now he wants to stand in this House today, after we've completed a significant part of that work, and throw rocks and blame everybody else, when in fact, he has done nothing -- the square root of zero in terms of trying to find a solution to this problem.

It's a significant disappointment -- a significant disappointment, Mr. Chairman -- to that member's constituents. I have talked to many of them. They're unhappy about what he's been saying publicly. They're unhappy about how he's positioning himself. He's a major disappointment, and he has offered nothing -- contributed nothing -- to try to find a solution to this very serious problem. That will be duly noted by the people who live in that member's constituency.

The Chair: The Chair would like to offer that we've canvassed this subject, and perhaps we should move on to another one.

D. Jarvis: I will not pursue this discussion that much longer. I do want to say that the member has contacted me many times about what's going on and advised me of many things that have gone on with regards to the situation in Logan Lake, with regards to Highland Valley. It's not quite what the Minister of Energy and Mines is trying to relay -- that he's done nothing. In fact, he's done quite a bit. He's been in contact with them continually.

In any event, I'd like to get back onto a subject that's . . . . We were going to go on to coal, but I'd just like to jump into Bill 12, the right-to-mine bill. I've had reported to me that all that has been done is put into process the tenure in parks and that they're still working on it. Then again, yesterday you said that you had acted quite a bit on that process with regards to . . . . I think your words were, in fact: "We've already settled four claims." I was wondering if you could tell me what claims you have settled on and if there is a list coming down the line as to how many more you expect to process. Also, is any of that out of the Windy Craggy area?

Hon. D. Miller: Yes. I think it's safe to say that we could give you a list of those companies that we have settled with, although there may be some issues of confidentiality around the details. I'll ask my staff in the front of the House here to provide as much information as possible without breaching any confidential agreements we might have with those companies.

D. Jarvis: Could the minister tell us how many they expect? Is there a lineup now as to what tenures are going to be settled? How many are there? I can appreciate the fact that he may not want to give us the dollar figures of them, but if he can give us some idea as to how many they expect to settle tenure situation with . . . .

[1515]

Hon. D. Miller: I think the member might recall that there were about 400 specific claims -- about 80 claimants -- initially. It is our intention to try to resolve all of those, using the mechanisms prescribed in the legislation. We've also recognized that legislation is prospective, so we've said as a matter of policy that we'll use the same basis for settling claims that arose before the legislation was passed.

D. Jarvis: Just before we close off that subject, Bill 12 effectively came into place last year at approximately this time. Are the claims for the time that Bill 12 came in? You have not gone back into the past to settle some of the tenure problems that occurred.

Hon. D. Miller: The four claims that have been resolved arose prior to the passage of the bill. Now, when I say that as a matter of policy we will resolve claims established prior to the passage of the bill, I'm not talking about going back to the turn of the century. So the industry knows what I'm talking about when I say that.

D. Jarvis: Now, on coal, the minister has had quite a bit to say lately on coal. Whether his party is happy about it or not, I don't know -- or whether they are trying to fool the troops out there or just what the situation is . . . .

There's no question that we have a considerable problem with coal in this province, in the sense that our markets are slowly dissipating and that we're in great competition with Australia. I guess Australia is our main competition at the moment. Someone told me that BHP in Australia, for example, has about eight million tonnes on the ground waiting to be sold, and they can't sell it.

I was wondering if the minister could clarify some points on coal, as to if his ministry has given any thought to using thermal coal for power or creating another industry other than a straight export industry -- in other words, using coal in this province as a method to create power, like Alberta is doing, so that we can use that for our industries.

Hon. D. Miller: The member is correct. There is a lot of coal on the world market today, and the Australians, with a lot of surplus, have driven the world price down to $41. While most of the mines in B.C. have managed to adapt to that, northeast coal is in some peril, in my view. I don't want to overstate that, but I think we should be upfront with people about the difficulties. The fact is that it's a combination of things, but essentially the cost of the infrastructure, the distance from tidewater and those kinds of things . . . .

Most of this is being driven by a dramatic decline in production in the Japanese steel industry, so their problems are real as well. I think it's going to be really . . . . With respect to coal, until there's a real resurgence, I think, not just in Japan but generally in the steel market . . . . It's a bit difficult right now with a lot of protectionism afoot -- the U.S., etc.

There is an assessment being done by the Columbia Power Corporation in response to a proposal put forward in the Kootenays to utilize coal for power generation. It's very much in the early stages. We obviously have to do the economic assessment as to whether or not it would be competitively priced power. There is a lot of coal in the region, and there are also markets, I think, particularly in Alberta, which has experienced some difficulty in terms of their capacity.

That issue is being looked at. I think we also have to be cognizant of the fact, as I mentioned earlier, that greenhouse

[ Page 12439 ]

gases and those kinds of issues are becoming more and more of a concern to people. I would suggest there's probably a bit of an inherent bias against thermal projects, but that doesn't mean we shouldn't examine them, and we're in the process of doing that through Columbia Power Corporation.

[1520]

R. Neufeld: I just want to expand a bit on northeast coal and to find out a little bit more about it. I have a pretty good idea about the seriousness of the situation, and it's something that everyone should be working together to try and resolve.

The reduction in tonnage. I know that the Japanese . . . . In fact, the member for Peace River South went to Japan, along with the minister, to talk to the industry there. Is the ministry in any position to say that they've in fact been successful in . . . at least looking like the Japanese will accept the fact that we can't cut any more northeast coal? I think probably everyone is aware that if we start taking another cut, it's going to mean something a lot more dramatic than just 60 or 70 jobs, which we just read about a while ago. I wonder if the minister could just give us some sense of what his feeling was when he was over there talking to the industry.

All of that was based on a desire by the Japanese at that time to have an alternative market. Rather than to be captive of the Japanese for their coal supplies, they wanted to open up new markets, and we followed along and spent a lot of money. The member is as familiar with the history as I am.

Since that original project, of course, there have been a few bumps along the road, and a lot of debt has been eaten -- to the point now where there are two mines, one owned by Teck and the other owned by what is commonly referred to as vulture funds, faced with the request by the Japanese to reduce their tonnage by a further 30 percent.

I wish I could offer some sort of detailed plan to say where this thing is going to go, but I'm not able to do that. It's a mix of private ownership and previous government investment. The member is quite right in saying that we ought to pay close attention to this, because it's not just the community of Tumbler Ridge. It's the commodity that's carried on B.C. Rail and the potential impact on B.C. Rail in terms of its revenue. It's the loss of the commodity on the rail lines -- both B.C. Rail and CN -- and the questions raised about whether the other commodity shippers have to pick up the slack in terms of cost. It's the issue of the federally owned Ridley Terminals in Prince Rupert.

So there's a lot at stake in this one. It is one of the most important files that my ministry and the Ministry of Employment and Investment are dealing with. We are aware of all of the ramifications. I can only say that we're attempting to play a productive role, with other parties, to see if we can't be instrumental, over time, in ensuring that the northeast coal operations continue. But at this stage I can't give any assurance or comments, negative or positive, with respect to that question.

R. Neufeld: I want to just touch on a couple more issues in the mining part of your portfolio. Then we'll be pretty well wrapped up with the mining part of it, and we'll go on to energy.

The minister will recall the creation of the Tatshenshini park. Of course, we talked earlier about Windy Craggy and the compensation that was paid there. There are quite a number, as I understand . . . . I've tried to get this number from your ministry. Last year in estimates you said that you would provide me with a copy of the outstanding placer miners that still haven't been dealt with in the Tatshenshini.

[1525]

I've asked the Minister of Employment and Investment over the years, and I've never been able to get a list of how many there are and where we're at. I know this goes back to 1994, but it's a huge issue for some people. I just wonder if the minister could . . . . He probably doesn't have it at his fingertips, but maybe he has some information that the deputy minister or someone with him could give to him about where we are at with the number of claims and how the process is carrying on.

Would some of these claims from the Tatshenshini actually be ones that the member for North Vancouver-Seymour asked questions about earlier? I relate to the four that the minister talked about that were prior to Bill 12, that have been settled. Are they part of the Tatshenshini?

Hon. D. Miller: I certainly apologize. If we had made a commitment to get information, even if it wasn't possible to do it, we should have still notified you. My officials have taken notes, and I'm advised that none of the four are related to placer claims in the Tatshenshini.

I did run into one of the people who is active in placer mining up in Atlin last Friday. We just chatted briefly at the airport, but he . . . . All he said was that he acknowledged the positive change in the tax collection system for placer miners that's contained in one of the budget bills. We will, if we have that information, ensure that the member receives it.

R. Neufeld: Okay, then, I appreciate that the minister will forward to me the number of claims that are outstanding and a brief description of where they're at.

The other issue I want to briefly talk to the minister about is an issue that he and I have discussed previously in estimates, and that's gravel mining -- as it relates to northeastern British Columbia, not down here. We're all aware that the federal government and the Ministry of Environment have agreed that there will be no gravel extraction below the 100-year floodplain. That has caused some difficulties in the northeast.

The minister knows the problems that we have in Fort St. John, I'm sure, because I've relayed them to him -- and so have others. It's probably not the same problem in Dawson Creek, other than the fact that there's just not enough gravel around. But in Fort Nelson, it's getting down to being quite

[ Page 12440 ]

serious, to where the concrete plant that mines gravel -- not out of the river, and a long way away from the river -- has not been able to get an extension to its lease.

This is going to cause some pretty big hardship, because there is no gravel in Fort Nelson. I mean, there's very little of it that's available. The federal government has tied up almost all the gravel that there is in the northeast because of the Alaska Highway -- the construction of the Alaska Highway and those kinds of things. So I have some serious problems with one operator that is going to run out in the not too distant future, and that's going to cause some real problems.

I guess the only alternative I can think of is going into the mountains some 100 miles away and starting to knock down rock and crushing it up there or something. We already have fairly expensive concrete in the community of Fort Nelson already, because it is so remote and there's such a small amount. We're probably lucky we have someone there that will actually do the concrete work.

I just wonder if the minister could -- maybe through his ministry -- talk with, or have officials talk with, the Ministry of Environment about trying to resolve these issues so that we can actually get on with life and these companies can have access to the gravel that's needed. I'm clear it's not in the river. It's not mining on an island in the river. It's mining gravel quite a bit higher than the river bottom, but obviously not as high as the 100-year floodplain. That is probably well over 80 feet above what the river is now. I've seen that river flood pretty high. Maybe the minister would like to comment briefly on that, please.

Hon. D. Miller: No, again it's not an issue that I've had the opportunity to visit, actually, for quite some time. I've asked my officials to make a note here, and we will look into the circumstances you describe.

[1530]

I think that generally beyond that, though, I'm starting more and more as I look at the issues around gravel to think that we need to develop a broad-based approach to look at this question. I mean, there's so many issues that arise. There was a major story on the weekend in the Vancouver Sun about the Pitt River operation. Clearly the conflicts between fish and gravel extraction, between municipal or regional governments and their bylaws and peoples' dislike, generally, of gravel removal, have reached a kind of stage where perhaps we ought to elevate it and appoint some people to take a broader look at it and make some recommendations.

We do need gravel, clearly. The member is very aware, coming from the Peace River, where supplies are limited. Ironically, in the lower mainland region, where there really is a fair amount of gravel, the problem there is that people don't like gravel pits. Yet we use, by some estimates, 50 to 100 million tonnes of gravel per year -- used by provincial, federal, municipal and regional governments, individuals, builders, etc. It's a very valuable and necessary commodity with a lot of trouble around its extraction.

I've met on numerous occasions with the operators. In the ministry we try to have the best regime we can to protect the environment. Notwithstanding that, there continues to be extensive conflict. Perhaps it's time to maybe look at a different process to review this more broadly -- and one which might be able to encompass some of the issues in the Peace River region as well.

R. Neufeld: I appreciate that. I'm glad to hear the minister say that. It is getting down, as they say, to the nitty-gritty, where we're going to have to act on it or do something different because of the availability of gravel in the whole northeast. In fact, whether it's Peace River South or Peace River North, I'm told by the Ministry of Transportation and Highways that the available gravel today is not enough to put one inch of gravel on all our gravel roads in North and South Peace. It's no wonder that we're running with roads with no gravel.

I think it's got to the point where it's serious enough that the Minister of Energy and Mines has to look seriously at this problem, both in the south and specifically, I know, in the Fort Nelson area. I appreciate that.

My colleague wants to ask some questions a little bit further about gravel extraction in his constituency.

B. Penner: I appreciated the comments of my colleague from Peace River North. I listened intently to the difficulties that legitimate gravel operators have in his constituency in obtaining gravel.

In Chilliwack, in late April, we had a situation where the Cheam Indian band -- without obtaining prior approval or permits, as required, from the Ministry of Environment -- extracted large quantities of gravel from the middle of the Fraser River, just east of Chilliwack. I'm told by some observers that up to 150,000 metric tons of gravel were extracted from the Fraser River in a period of about ten days by the Cheam Indian band.

My question to the minister is: does his department have any plans to levy the royalties normally associated with gravel extraction upon the Cheam Indian band? I'm told, again by observers of the gravel industry in my constituency, that the typical royalty would be about 50 cents per metric ton. If that's correct, and if it's also correct that the Cheam Indian band removed 150,000 metric tons of gravel from the Fraser River, then B.C. taxpayers are owed about $75,000. Could the minister please advise this House whether his ministry plans to collect that money on behalf of B.C. taxpayers?

Hon. D. Miller: I can report that in response to that activity, we did issue a stop-work order under the Ministry of Energy and Mines. As well, I believe, both Environment and the Department of Fisheries and Oceans took actions under their regimes. The issue is, I think, caught up between some agencies. The fundamental question the hon. member asked about whether or not we would bill for royalties is more appropriately addressed to the Minister of Finance, who collects royalties on gravel.

[1535]

B. Penner: Does the minister then take the position that it's not his ministry that establishes the royalties applied to gravel mining in the province of British Columbia?

Hon. D. Miller: That's correct.

B. Penner: Just for the record, I'd let the minister know that I have written to the provincial Minister of Environment, as well as the federal Minister of Fisheries, and have demanded that there be a consistent policy on the issue of gravel extraction from the Fraser River.

I don't think it's acceptable that private operators who obey the law are not allowed to extract gravel, but other

[ Page 12441 ]

groups that see fit to extract gravel are allowed to do so. I know the minister said that some action has been taken. In fact, that action is, at this point, limited to an investigation. Many people tell me that they suspect that if their private enterprise had gone out and extracted gravel from the Fraser River without the prior permits in place ahead of time, they would be already charged and in the courts and their equipment would have been seized at this stage. I can't say whether that's true or not.

Certainly that is the common perception in the Fraser Valley: that there is a double standard being applied on the issue of gravel extraction. I'd encourage the minister to use whatever influence he has to demand that there be a consistent policy within his government on the issue of gravel extraction in the Fraser Valley and in the Fraser River itself.

Hon. D. Miller: I don't fundamentally disagree with the member's contention that there ought to be consistent policies consistently applied. There are obviously other agencies -- DFO and Environment -- involved. But I can't disagree with the fundamental premise being put forward.

M. de Jong: I won't be long with the minister. He referred to the difficult situations with respect to gravel extraction that arise periodically, particularly in the more populated, southern parts of the province. One of the issues that we in this chamber occasionally hear about when these disputes occur relates to the notice requirements under the relevant legislation, requiring notification where permits for gravel extraction are being sought.

I'll try to caution myself. I know that this is an issue that is the subject of at least one -- possibly two -- matters that are before the courts. So I won't ask a specific question about those matters. But is that, from a legislative review perspective, something the ministry is looking at? Or is the ministry satisfied that the legislation as it presently exists is comprehensive enough -- does the job it's supposed to do -- and that these are anomalies that will simply arise over the course of time?

Hon. D. Miller: No. I don't take a hard-and-fast position. In fact, I'm certainly open . . . . As I indicated in response to a previous question, I think that the broader issue is one that needs to be looked at. We're in a position as the ministry where, if people make application to us for a gravel pit or a quarry operation, we're obliged to treat them seriously -- to give the due diligence required by our legislation and Ministry of Environment legislation that may apply. If we satisfy ourselves that the applicant passes all of those tests, then from a legal -- really a moral -- point of view, we're obliged to issue a permit for extraction.

Most frequently, the difficulties arise between my ministry, having done that, and either a municipality or regional district that objects in some way or another to that taking place. There's a patchwork of bylaws at the municipal-regional level that govern these activities -- soil removal bylaws. Quite often the finger is pointed at the Ministry of Energy and Mines as being the bad person, if you like, for having issued a permit, when in fact we're complying with the law.

Maybe notice provisions and those kinds of things -- opportunity for public consultation and public comment -- should also be subject to some review. I'm happy, if the member has some specific recommendations to make along those lines, to receive them. But I'm increasingly, as I say, coming to the view that we need to do more, perhaps.

[1540]

I don't know that the public necessarily understands the importance of gravel for not only government but also the private sector. It seems to me that it is desirable to have a regime where we can access those resources with a minimum of conflict.

M. de Jong: I don't think I quarrel with the observation that the importance of the resource is something that is frequently lost on those of us that enjoy its benefits but don't like to see a cloud of dust in our neighbourhoods. I think that if you spoke to those individuals -- those operators -- who derive their living from the extraction of aggregates and gravel, they would tell you that the notice requirements are, if anything, onerous. Then two weeks later -- as the minister points out -- one will hear from residents who will decry the fact that . . . .

"How could this permit have been issued without us knowing about it?" Lump in the demands of regional and local government, and sometimes it's one of those regulatory areas that it is very difficult to achieve coordination and difficult to satisfy all of the parties. Nonetheless, I will offer to the minister this observation: on at least two occasions at my end of the valley that has been an issue that I think has ultimately become the subject of litigation, where there is a dispute about the adequacy of those notice provisions where an application has been made for extraction of aggregate.

R. Neufeld: That ends our questions on the Mines part of this portfolio. If we want to just briefly stop for a few minutes and wait for other staff to come in . . . .

The Chair: By agreement, we'll take a five-minute recess.

The committee recessed from 3:42 p.m. to 3:48 p.m.

[W. Hartley in the chair.]

R. Neufeld: I want to touch briefly, to start with, on the Energy part of the minister's portfolio, on projected revenue in table H5, in the consolidated revenue fund. There are some projections there, of course, from last year, and again from this year. Last year -- in fact in June -- the government announced a reduced oil and gas royalty rate of 20 to 40 percent, depending on when the land was purchased and when it was drilled.

What we see, if we look at the natural gas royalties estimated for the year 2000, is an increase to $205 million from $192 million. That's an increase of about $13 million. Yet we see that the number of wells being drilled is about the same. I'm just wondering if what I understand is projected here is correct, or if there is something else happening in the northeast about the production of natural gas that maybe I'm just not aware of.

[1550]

Hon. D. Miller: Yes, the explanation -- it's general, obviously -- relates to volume. In other words, it's the volume of gas that is flowing, and there is an increase in that. It also relates to the price. Prices have generally trended upwards. A number of the new wells that have been drilled or are being drilled under the new royalty regime have not yet come into production, so we haven't seen the revenue that would flow

[ Page 12442 ]

from those wells. Really, the explanation for the increase -- the $192 million to whatever it was -- relates to both volume and price.

R. Neufeld: The other estimate that's in that same table -- H5 -- puts petroleum royalties at $68 million, both for last year and for the upcoming year. Maybe the minister could tell me why that would stay consistently the same, knowing the price fluctuation that took place. We're back around, I think, about $18 a barrel. But for a good part of last year, the figures were fairly high. I know they went down around $11. Why would that stay absolutely consistent? Or is there expected to be no activity or very little activity in the drilling for oil?

Hon. D. Miller: Again, there's a combination of factors, I guess, in determining projections for revenue -- in this case, in terms of oil. I think we had maintained a fairly conservative projection on price. The member is right: there has been a bit of a roller-coaster on the price of oil. While it did go down to a very low level, it's now come back up. Volume is up slightly. So all in all, when you balance all those factors, our view is that the revenue will stay fairly flat or consistent with last year.

R. Neufeld: The June 12 press release indicated that, along with industry, the province expects to achieve the goal of doubling the provincial oil and gas production over the next ten years. I guess we're almost one year into that ten -- from June. What I can ascertain is that there has not been much of an increase in drilling for either oil or gas. It's almost consistent with last year. Is there something that is going to maybe happen within the latter part of the year that I'm not aware of?

Are there some big land sales coming up so that there may be some increased activity in the latter part of the year or the first part of next winter? Or maybe there's some other explanation why this hasn't -- I would hope in a kind of a gentle curve -- started going up to meet those targets. What I see right now is a flat line -- in fact it's maybe even dipping a bit -- even though the price of oil has come back.

[1555]

Hon. D. Miller: We're actually up. If you take '98 over '97, we're at about a 9 percent increase in the volume of gas. I don't think there's any question, though, that the low price of oil caused quite a shake-up in the oil patch. The member probably follows these things, as I do, and noted that there was a significant number of companies which were probably more heavily into oil and which, as a result of the dramatic drop in price, experienced huge cash flow problems.

There has probably been, over the last year, more activity in terms of companies being bought up by other companies -- mergers, acquisitions and all of that kind of interplay that takes place in that kind of market. In fact, some companies ended up virtually giving themselves away, because they simply ran out of cash flow. They were leveraged out a little too much, and the price took away their cash. Bang, they were on the block.

All of that, I think, had a negative or dampening impact on activity in the gas and oil patch. But I think there's been a strengthening. I think some of these mergers have actually been good. There's some real muscle in the gas and oil patch, both in Alberta and in British Columbia. And increasingly . . . . Just a little item from today: Chevron has discovered a massive find in the Northwest Territories. It could produce 70 million to 100 million cubic feet a day. So I think that more and more, as the marketplace looks pretty favourable moving out, we're going to see more activity.

But I think the main reason for the dampening impact has been the oil price and the consequent impact on companies that are in the business.

R. Neufeld: Okay. I hope that the minister is right that we're going to see an increase now, with the price of oil back again for the latter part of the year -- the last half of the calendar year, at least.

It's interesting. I didn't hear about the hit that Chevron just made. Would the minister tell me which part of the Territories that was in?

Hon. D. Miller: What did I do with that? I just pulled it off the Net earlier today. Actually, someone pulled it off the Net for me earlier today. I tried . . . . I don't want anybody rushing out and buying stock on the basis of this.

Chevron Canada has discovered this find near Fort Liard. They estimate it could produce at 70-100 million cubic feet a day -- this is just 25 miles north of the border -- with reserves estimated to be 400-600 billion cubic feet. Interestingly enough, I was meeting with CAPP yesterday, and one of their representatives talked about the potential for activity to head up into the Territories. There's some confidence that there are significant reserves in there.

But that's not to denigrate British Columbia at all, because we . . . . Just to give you some statistics in terms of the falloff -- the impact that I talked about in the answer to my previous question -- we experienced a 56 percent drop in bonus bids. Just to illustrate, Alberta was off 40 percent, Saskatchewan down 59 percent and Manitoba was off 95 percent. So it affected, really, the western provinces which are into oil and gas. I think there's a good recovery underway now. Let's hope the . . . . One prognosis for the price of oil was that it would go to five bucks.

I don't think that we are going to see that happen now. With the discipline that OPEC seems to be exercising, there should be a decent -- hopefully, stable -- price and a return to not only normal activity but . . . . I'd suggest that gas will drive a lot more activity than we've normally seen.

[1600]

R. Neufeld: Just briefly, because we're talking about Chevron and the Northwest Territories and around Fort Liard, there has been a huge activity by Alberta Energy around the Fort Liard area. In fact, through the last winter I think there was about a 1,500-person camp -- or man camp, they call it -- in that area. It's a tremendous number of people working in that area in the drilling industry. Some of that will have been in the Territories, but most of it in British Columbia. So I'm going to try to get the minister to help me with the Minister of Transportation and Highways.

I know this isn't in your portfolio, but again, the Liard Highway is going to service that whole area. The Liard Highway in British Columbia is about 110 miles and obviously not in super shape -- and hasn't been for a long time. And it's not really built . . . . I guess I shouldn't say "built." It's built fairly well but not for the amount of traffic that is going to end up going up there, because there are also some huge reserves in the southern Yukon up there that could come on stream.

So maybe you could help me with the Minister of Transportation and Highways, who's been ignoring the Fort Liard Highway for the last couple of years. We can look at getting some of that gravel on that road that we spoke about earlier.

[ Page 12443 ]

I want to go on a bit more about the numbers. I appreciate that we're down 50 percent in the dispositions. I want to ask why, in the petroleum lands branch, the Ministry of Employment and Investment still puts out that information for bonus bids -- oil and gas dispositions. I wonder if that's just something that hasn't been caught yet. Why wouldn't that come out of the Ministry of Energy and Mines? And why don't those numbers jibe with the numbers that we see in table 5 in the budget manual?

Hon. D. Miller: Just to answer the first question, the communications shop of Employment and Investment serves the Ministry of Energy and Mines, so perhaps that's the reason why. I wonder if the member might restate his second question relative to some tables that don't appear to jibe.

R. Neufeld: If you look at the bonus bids for '98-99 -- the list put out by the Ministry of Employment and Investment -- it shows $67,388,729 for the fiscal year. Okay? Now, when you look at the fiscal year in table H5, there is no number that even comes close to that. Obviously there is some mixup of . . . . I would think it should be under "Permits and fees." Permits and fees show $104 million, so I'm not exactly sure where the $67.4 million comes from.

I'm going to send these two over to the minister. Rather than take the time here, you can look at it and maybe give me an answer later on.

Hon. D. Miller: That's fine. I think it would probably give my officials time to look at these, and I'll respond in due course.

R. Neufeld: The Oil and Gas Commission. I see we have the oil and gas commissioner here with us today, and I want to ask some questions around the commission. Before I do that, I want to say that I am particularly pleased with how the Oil and Gas Commission has worked -- with the competency of the people that are there and how they're working -- and that I think it actually will be positive for the oil and gas industry. I just want to put that on the record so that you don't take some of the questions I ask the minister as meaning that I don't appreciate what's happening with the oil and gas commissioner.

Last year -- the minister knows this full well -- we in fact supported the bill when it came to the House. We debated it very little to put it through, knowing the time frames that we were going to be faced with -- and always are in the oil and gas industry, as it relates to the weather. We were hoping that it would have actually been up and running long before the end of October. Unfortunately, I think that that delay caused some problems. In fact, I know it caused some problems -- and not of the making of the Oil and Gas Commission. The actual implementation of the process -- or the length of time it took to get it implemented -- was not very good.

[1605]

Maybe the minister could explain to me some of the reasons why it took from, I think, June -- when we passed the legislation, which was a fairly straightforward piece of legislation -- until the end of October before a commissioner was appointed. At that time, he basically walked into some 200 permits to process, no staff and more or less an empty office in Fort St. John. Maybe the minister could explain that to me a little bit.

Hon. D. Miller: I was almost going to say that in terms of the complexity of government -- and let's depoliticize that answer -- some people think that three months actually isn't a bad time frame. I know that in previous portfolios, where I've been made responsible for splitting a ministry -- for example, in Skills, Training and Labour, taking the training portion out of the then Human Resources ministry and transferring it to my ministry -- it involves an incredible amount of logistics in terms of staff transfers and those kinds of things. I would have liked to have had that up and running sooner.

It did take three months, but in a general sense, that's not bad. I do appreciate the member's comments about the commission.

I believe I said -- I'm paraphrasing myself -- when I spoke in Fort St. John about the commission . . . . I was up last year signing a couple of MOUs. I said something to the effect that, really, now the work is just starting. I truly believe that we're still in that phase. As much as I think that the commission has shown very positive potential . . . . I think there are some statistics -- I'm not going to quote those -- in terms of turnaround time for applications and the rest of it. I think there's an enormous job yet to do.

When you start something new, it's not surprising that sometimes it takes a period of time before you can really get good at what you're doing. The commission is up and operating. It still has to deal with a number of issues with respect to the advisory board and the environmental fund -- those kinds of issues. There are ongoing issues on the ground, but I think we've got the right model and the right people. So, over time, I think they'll do nothing but get better.

R. Neufeld: I appreciate that explanation. I'm not as familiar with it as the minister is, but I can understand that it would be difficult to start something up basically from scratch.

I guess the minister talked about staffing. As I understand, staffing is still taking place. I think the commission now has a fair number of staff recruited but is still staffing. As I understand from the previous commissioner, when he arrived there, basically he had a seconded executive secretary. It was difficult for him, at the time, to even start working on the 200-plus applications that were sitting on his desk, let alone try to get staff in place to get it up and running at the end of October.

That's almost -- well, it is -- wintertime where I come from, and people are wanting to have their permits processed. I just wonder if the minister could tell me how staffing is progressing and when we will be staffed to what the ministry feels it needs for staff to operate in the present environment.

[1610]

Hon. D. Miller: We had forecast 90 FTEs. Currently we have 75, leaving 15 vacancies. We are currently in the process of hiring eight. Now, we may leave it at that so that we have a bit of a cushion in terms of . . . . You don't want to overstaff. The commission budget is an issue that, again, I talked to CAPP about. The deal was that it's paid for through the fees that we levy. I think that we'll have some ongoing issues with CAPP about that. Hopefully, if our estimates in terms of activity prove to be right, there will be a great deal more work available.

I think the commission is simply going to have to look at that and make the kind of adjustments they need to make to deliver a quality product to the clients.

[ Page 12444 ]

R. Neufeld: I appreciate that response. Are all the key positions now filled? I go by the numbers that you gave me. Are the key positions for the Oil and Gas Commission filled? If not, when do we anticipate they will be?

Hon. D. Miller: By and large, yes. Of the eight people we're currently engaged in hiring, there are vacancies, and six of those will be on the aboriginal staff. Of course, a deputy commissioner needs to be recruited as well.

R. Neufeld: The deputy commissioner . . . . Is that position -- and I know the gentleman that's filling it now, quite ably -- being advertised? What process are we going through to fill that position permanently?

Hon. D. Miller: We're going through some discussions now in terms of the best way to fill that vacancy. We haven't really made a final decision.

R. Neufeld: Maybe I can just explore that a little bit more. How will that position be filled? Will the deputy commissioner be an advertised position? Or will this be someone that applies from within house that will get the job? How are we going to go about that?

Hon. D. Miller: We may not advertise. In other words, we make take the approach we took at the outset. I think I argued at that time that we had to get moving. I think we made the right choices, quite frankly. I was a bit disappointed in the resignation of the original commissioner. But notwithstanding that, I think that things have worked reasonably well, and so my view is that we ought to look for the best person for the job. I think the member appreciates what I'm saying. In fact, if he has ideas in that regard, I'd be happy to talk to him about it.

R. Neufeld: Not wanting to get slayed with one of my own letters again, I'll not bite on that offer but hope that we fill the position as quickly as we can with a permanent person so that, actually, that person -- whoever that happens to be -- can get on with their life. I know it's expensive, the process we're using now, and there could be alternative ways of doing it.

The other question I have is the funding, and I understand what the minister talked about earlier -- that it's funded basically by the oil and gas industry. The budget, I think, is for just over $8 million. Yet in the estimates I see $13.4 million. Maybe the minister could explain to me the difference there -- why?

Hon. D. Miller: It's a combined number. It reflects both the commission's budget and payments made to first nations under the MOUs.

[1615]

R. Neufeld: That doesn't add up, in my mind, without doing a little bit of math. If it's $13.4 million . . . . The ministry operations, I think, are $8 million or just over $8 million. That leaves $5 million left over. Is that what's going to the aboriginal bands? I know I want to touch on that a bit later on, but from my quick addition, the number of bands that have signed on certainly don't amount to $5 million. There is something more that must be in those numbers.

Hon. D. Miller: After discussion with my officials, I'll stick to the same answer: it's a projection of both the commission budget and payments that would be made to first nations under the MOUs. That's the answer, after some brief discussion.

R. Neufeld: I'll pursue that a little later on when I deal with the MOUs and the aboriginal part of it, and it will give me a little bit of time to reflect on my numbers also.

I wonder if the minister could briefly explain to me the operations to date of the Oil and Gas Commission -- maybe give me a bit of its successes and what the challenges are that the commission is looking at in the next six months of this year.

Hon. D. Miller: Sorry -- I just wanted to get some statistics on the applications and turnaround, because I think that is important. I'll give you those first and some previous numbers just to contrast.

In the November-to-February time frame, '97-98, 485 well authorizations were approved and 387 wells drilled. In the same time period for '98-99, 479 well authorizations were approved and 356 drilled. Since October '98, the commission has processed 491 applications to drill, 298 pipeline applications and 83 geophysical applications. The average time for processing well applications has decreased from 44 days in October '98 to 16 days in February '99. The commission appears to be fulfilling its mandate.

In addition to that, the ongoing issues of dealing with environmental considerations . . . . There are issues around trapping and those kinds of things that require constant work: the advisory committee, which needs to be finalized; the environmental fund; and continuing to focus on the issue of ensuring that you've got a system that works, so that when people make applications, they get the response as quickly as possible.

R. Neufeld: Does the Oil and Gas Commission have a mission statement or strategic objectives? What would they be?

[1620]

Hon. D. Miller: Yes. Not only is there a mission statement, but there is a consultation plan. We can certainly provide . . . . I think the member has had an opportunity to sit down with the commissioner and to discuss these questions. I certainly think that with anything of this nature, the member should feel free to request of the commission those kinds of documents. I'll just leave it on that basis. If there's any difficulty, he can approach me. There is a mission statement.

The mission is reflective of the mandate as set out in the enabling legislation that communicates the purpose and intent of the organization. The Oil and Gas Commission, as the member knows, was created to regulate oil and gas activity in the public interest while supporting and enabling the enhancement of the industry and engaging all key stakeholders in the decision-making process. I won't go on. Suffice it to say that there are documents available for the member.

R. Neufeld: Is the commission responsible for the oil and gas industry provincewide, which would include the north coast?

Hon. D. Miller: It's a bit of a moot point in this respect. We've not had to face it. The commission was set up to deal

[ Page 12445 ]

with the situation that exists now in British Columbia. The member may want to explore issues of the offshore now or subsequently. I don't have any particular bias one way or the other. It seems to me that if we have a commission that has developed certain expertise around the issues of oil and gas -- the activities on the land base, dealing with the public, consultation and those kinds of things -- ought to avail ourselves of their expertise. So I've not made any hard-and-fast decisions. It's much too premature, I think, at this stage.

There are other land basins within the province that presumably, at some point in the future, may be attractive for drilling for oil and gas. In that case, I think the answers would be a little more straightforward. I think it would be very easy to replicate the commission in a miniature form, perhaps, in different regions of the province.

The offshore is somewhat different. If we look at the experience on the east coast, it's subject to an accord between the federal and provincial governments. There are many pieces to that accord, so we'd have to consider that question down the road a ways.

R. Neufeld: You know, in the northeast . . . . I know the minister was up there and signed some MOUs, and there's all kinds of ongoing discussions with first nations, which is great. I don't take any umbrage with that. I think that's important with the local communities and environmental groups in the northeast. There are discussions with all of them. In fact, anything I've read always lists out in that form -- first nations, communities and environmental groups.

The minister talked about it earlier, and that's what brings it to mind. It is the issue of drilling around the community of Fort St. John -- Kaiser's well and sour gas and those kinds of things. What kind of . . . ? There's nothing said about having some kind of relationship with those rural residents or the farmers. I think the farmers are becoming, as I said in my opening remarks, a bit more -- not intolerant . . . . They want a bit more explanation of how some of the land sales go, where they actually drill, whether they're able to drill right close to their home place, especially in the sour gas fields.

I mean, it's a huge issue for them, with animal health and those kinds of things. So I just wonder: is there something that the Oil and Gas Commission is going to set up to actually start relating with that industry specifically -- that being the agricultural community in the northeast, which, of course, is huge?

[1625]

Hon. D. Miller: The commission has been doing some work where -- for example, the pilot project . . . . The local resident-industry stakeholder communication process in the Buick Creek area started in April of this year. But I do believe -- and I'll give you a general answer . . . . I think that for the first time . . . . The member, obviously, is closer to the public there than I am, but I think there's a sense that with the commission headquartered in Fort St.

John, with the advisory committee and with the commission's mandate, there will probably be a better way to relate -- with the commission there and the advisory committee there -- to some of these questions. I talked earlier today about how some of them are sometimes difficult, whether it's the issue of well proximity to residential areas or the imposition on agricultural use. Having the vehicle and the ability to consider and resolve those problems locally is, I think, a distinct advantage. I think the commission is aware of its mandate and will act accordingly.

R. Neufeld: I just would like to see, maybe in the . . . . What I'm asking is that we start including that agricultural community, because it's a huge component around Dawson Creek and Fort St. John, mostly. There's some in Fort Nelson, but not specifically where a lot of the drilling takes place. But around Fort St. John and Dawson Creek it is an area of concern, and one that's brought up to me. I'd like to maybe see it included in the documentation we have -- that we're actually going to set that up and start working with those different organizations.

Whether it's a grain farmer or a cattle rancher or whatever, they're all represented by agencies. I think they will feel more comfortable being able to go to the office in Fort St. John. I agree with what the minister says, but it's always mentioned in any . . . . When you talk about it not being there, people feel a little bit left out. So it's just something that has been brought to my attention. I'm aware of the commissioner setting up a meeting with people in Blueberry, and I think that's great. I just think it has to be a little bit more formalized and part of the process of the business plan.

The minister touched briefly on the advisory committee. Could he tell me where we're at with the advisory committee?

Hon. D. Miller: We are in the process. I'm advised that last Wednesday letters of invitation went out. There's been some advertising for people to put forward names. The member is aware that there will be representation from CAPP, local government and others, as well as at large. That's in the process now.

The other question the member asked with respect to agriculture . . . . It's important to note that the commission is developing a comprehensive stakeholder outreach program for the next six months. On an ongoing basis the commission will meet with individual trappers and farmers, including first nations consultation between January and March. More than 600 stakeholder consultations have been achieved. It appears to me that they're out there talking to the people, and hopefully, it won't take too long to formalize the committee and get on with that work.

R. Neufeld: I guess, dealing with the community at large, and trying to get their input . . . . How does the commission work in interagency . . . with the Ministry of Environment, the Ministry of Forests and the Ministry of Transportation and Highways?

I'm particularly interested in transportation and highways and how they relate to the Transportation and Highways ministry in construction of roads or upgrading of roads into areas where the ministry is intending to have some large sales that have the probability of some good returns on oil and gas -- that we start looking at some of that infrastructure in the northeast. The minister is quite well aware that it's fragile at best. In fact, it's in terrible shape.

I think that there has to be some working between the ministry and the Ministry of Transportation and Highways to start getting some direction on where some of those scarce dollars that are spent in the northeast . . . . In fact, in my constituency this last year $6 million was spent on road upgrading on about 3,500 kilometres of gravel road. I think the minister will know that doesn't go very far.

[1630]

I would like to see . . . . Maybe we already do it. Maybe I'm not aware of it. If we could start on that process, so we start looking at the proper roads where the industry is expect-

[ Page 12446 ]

ing to work in the next five to ten years, as best that they know . . . . I know that the group that I helped put together to start with has worked very well trying to put together designated roads that should be fixed first. I also want to look a little bit more to the future to see where some of the gas plays and the oil plays are going to be so that we can upgrade that infrastructure -- at least put it into the mix so we talk about it.

Hon. D. Miller: Yes. Well, the short answer is that the commission is aware of the issues and has worked and will continue to work on an interagency basis. The member makes a very good point. If you can collaborate in terms of your planning so that Transportation and Highways knows where there's going to be more activity and you can coordinate, it makes all the sense in the world. I think that is happening.

The regional districts also did a very good road study some time ago for the region. The member may want to pursue this -- it's another line of questioning -- but they're also trying to play some assisting role in the Ministry of Finance on some issues of ensuring that revenue is collected.

R. Neufeld: One other issue that I would like to just ask the minister about is the purchase of equipment for the office in Fort St. John, in the building. I don't quite know how that procurement takes place. Was it done by tender? Was it actually equipment that came from other offices within government? Was there a tender? If there was, could I at least see it? I ask that -- I'm going to be upfront with the minister -- because I've had some rumours that it wasn't done fairly. I'm not going to say whether it was or not.

But I always hear that, and I'd like to have the information to demonstrate, to those that tell me that, what the process actually was. It can shorten up the heated feelings fairly quickly.

Also, the equipment that obviously was purchased . . . . I shouldn't say obviously, because I'm not sure; maybe it came from other offices. But would the equipment that the Oil and Gas Commission has be the most up-to-date equipment so that we can keep track with industry? We know that they're updating all the time and have the most modern equipment. Are we in fact tracking along with that?

Hon. D. Miller: Just a series of responses. The industry apparently agreed to pay for both the computers and the furnishings because they wanted good equipment, and they wanted the place to look nice. It went through the Purchasing Commission. There was a complaint, I believe, from the second bidder, but the commission itself ruled that it was fine. I think they're Pentium 300s -- which, of course, we're all familiar with.

[1635]

R. Neufeld: Okay.

I want to talk a bit about the regulatory process or, as the minister and the government talk about, the removal of red tape. The minister and I have had quite a few discussions over the years about regulatory issues, regardless of what ministry he was in charge of. I researched back to August 1996. This ministry -- or the Minister of Employment and Investment at the time, but responsible for oil and gas -- talked about streamlining regulations. In fact, in November '96 the minister met with CAPP to discuss industry concerns.

One of their big concerns was the overlap between federal and provincial regulations -- those kinds of things. And getting on towards February 1998 the CAPP president, David Manning, said the regulatory requirements may be the number one impediment to oil and gas industry growth in the province of British Columbia.

We had a business task force in Fort St. John, put together by CAPP and the local Northern Society of Oilfield Contractors and Service Firms. They put forward quite a few issues about regulation and some other issues -- financial, taxation -- and what could be done to enhance the industry. Even the petroleum titles branch had quotes in their business plan from '97-98 about the province of British Columbia having some onerous regulations and that we're trying to compete with Alberta and the federal government in the Northwest Territories. They're reducing their regulation -- not to nothing, but they're actually making it easier for government to work . . . .

It's an issue that comes all the way through. I don't mean this to be hugely critical. I would rather that we got on with doing the things that are best for the province of British Columbia and, of course, the oil and gas industry specifically and how we're going to deal with that. Maybe the minister could briefly explain to me what regulations have been changed or what legislation has been changed to actually make the industry more competitive. We go right up until July '98, seeing issues . . . . In fact, we see them today in the newspapers, but I'm not going to talk about those too much.

But we see issue after issue where regulation and interference in the industry is causing it not to be as productive as it could be.

Hon. D. Miller: I'm overwhelmed, Mr. Chairman, by the advice I'm receiving in response to the member's question. But I would say that the biggest initiative, clearly, is the creation of the commission and establishing legislative authority for the commission to act. As the member is aware, in debate on the legislation itself, the Forest Act, the Forest Practices Code of British Columbia Act, the Heritage Conservation Act, the Land Act, the Waste Management Act and the Water Act . . . .

The fact that they've been put under one roof, with authority vested in the commission to deal with all of these issues is, I think, in and of itself probably the biggest single streamlining . . . . I won't say deregulation but streamlining.

Quite often I think you have to separate issues around regulation into two categories. One is the regulations themselves. Do they make sense? Are they required? Should they be updated? Should they be dropped? But equally important, in my view, is the application or the implementation. When applicants previously had to make the rounds of the various agencies to get approvals, obviously it was more time-consuming and cumbersome. Under one roof it's, I think . . . . Certainly the numbers, the turnaround time -- the statistic I cited earlier, from 44 days to 16 days -- is testament to that.

We are working with individual companies who've made cases. For example, there are the royalties on heavy oil. They claim -- and I think we've accepted their arguments, because we've not been too much in the heavy oil business; we've not focused on it -- that we ought to review that and look at other jurisdictions like Saskatchewan and see what their royalty curves are like, to encourage exploration and development in that field. Similarly, there are companies that have, I think, innovative proposals to try to extract gas in areas that were previously thought to be uneconomic -- lots of water, for example. So we're prepared to look at adjusting royalties in those kinds of circumstances.

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I think that the commission will, over time, continue to get better, as I say, and refine and, hopefully, make recommendations to government where they think regulations are inappropriate or need to be changed. All governments have regulations. Sometimes they can be frustrating. But as I said, it's interesting. Sometimes it's really the way in which agencies deal with those regulations that is even more frustrating than the regulations themselves. With the commission in place, we're well positioned to deal with these kinds of questions.

R. Neufeld: I appreciate that response, and I think that probably . . . . In fact, I know -- not probably -- that the Oil and Gas Commission will help a lot. I said that in my opening remarks. I think it will make it easier for the industry. But to just say that we've taken all the regulations we have and put them into one body now, and they can administer it . . . . I don't think that was the drift I was getting from CAPP, from the task force in Fort St. John and from the ministry's geological branch -- that that's what they meant. I think what they're meaning is that there is some problem with overregulation. That's what I'm trying to get at.

I appreciate how the process works now, and I think it will work better. But I will maybe just read into the record from the 1997-98 business plan for the petroleum titles branch: "At home, an industry-oriented government in Alberta is attracting spending by reducing red tape and the Northwest Territories are making available for exploration large tracts of high-geological-potential land." So within the ministry itself, we know that there are some issues. Maybe the minister could tell me . . . . You don't have to tell me today, and I don't think you'd have it at your fingertips.

But you could send to me, when you get an opportunity, any regulation that has actually been changed -- other than the creation of the Oil and Gas Commission. That aside, has something been changed? Have we removed some needless regulation that would affect the oil and gas industry? I'd like to have that, if in fact it is the case that there is something like that in place. Because I always get asked the question, and obviously . . . . The answer so far has been that, no, nothing has changed other than the creation of the Oil and Gas Commission. I get that same drift from the minister.

So if you could provide me with that, I'd appreciate it.

The other thing when we talk about regulation . . . . Obviously, even the Oil and Gas Commission recognizes that they have to deal with the regulatory burden in some way. It talks about, in the report: " . . . to operate, integrate and redesign the regulatory process." Maybe the minister could just explain to me a little bit what that process is going to mean? Is that going to mean that we're going to remove some regulation or redesign it -- or what's going to happen there?

Hon. D. Miller: I am informed that the commission intends to proceed with an examination of the production and drilling regulations. It's their view that they're out of date and that they need to be revamped, and they will be embarking on that process. Again, as I think I indicated earlier, I've really put the commission on standing notice to advise the member of these kinds of activities that they're engaged in.

We did respond to some issues that were raised about the application of the Employment Standards Act, and there were some modifications to deal with workers in the oil and gas industry. But beyond that . . . . Again, I don't have that at my fingertips, and I'd appreciate the members not asking me to go through an extensive list. I would say, however -- going back to one of my previous answers, where I read a list of the acts that the commission is charged with administering -- that if changes are made in those acts, they apply universally in the province -- and clearly would apply as well in the region.

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R. Neufeld: I appreciate that. I look forward to being kept up to date on that and to seeing if there have already been some changes that have taken place that I can have at my fingertips.

I want to touch briefly on an issue about taxation as it applies to and affects the oil and gas industry in northeastern British Columbia. The minister's quite well aware that at the end of January or February, I wrote a letter to the minister which was the result of meetings I had with some operators in Fort Nelson who felt that far too many Alberta companies were coming across the border, through the back roads, and taking work away from northeastern British Columbia -- and how we deal with that. The minister responded to me at the end of April about those issues.

Somehow, I'm not sure when, the Ministry of Finance finally got involved. I do have a copy of a letter from the Ministry of Finance -- from a Mr. Greg Reimer, executive director of the consumer taxation branch -- which is dated March 15. I just want to bring to the minister's attention the fact that on March 15 the work was just about done. I know it's not easy; I'm not trying to say that it is easy. But somehow we have to react to these issues long before the end of the drilling season, which happens to be . . . .

Specifically, in Fort Nelson -- where most of the work took place last year -- the major drilling season is, for all intents and purposes, done by mid-March. There's a little bit of finish-up, and people are moving out.

But it's a problem that's related to, again, the price of oil. In Alberta, there are companies that actually operate a lot cheaper. The taxation regime and those kinds of things are a lot less onerous than they are in British Columbia; everybody knows that. In fact, by the ministry's own figures, it's about 20 percent cheaper to operate in Alberta than it is here. This is a study done by the ministry itself a couple of years ago. So what they do is . . . . They come over. They don't abide by the labour standards, to a certain degree. They don't pay the sales tax. They come in and work out . . . .

It's a huge area. It's not as though we're talking about downtown Victoria and just going out to Colwood or something. We're talking about a huge part of the province that stretches to the Yukon and the Northwest Territories border and that's serviced out of Fort Nelson. But it can be accessed very easily from High Level and Rainbow Lake -- actually, real easily.

That's where they come in. I know I've brought this to the attention of the minister -- and ministers prior to you taking over the ministry, year after year. I don't know what the answer is, or I wouldn't be standing here just complaining about it all the time. I'd be giving some recommendations. I have one that maybe I'll give a little later on after I hear what the minister says about what we can do to try and alleviate this problem. I know you're not going to stop it totally. The bigger companies pay their tax. It's the smaller ones, the smaller contractors, that don't.

That's a real serious issue with folks in Fort Nelson and Fort St. John -- to a greater degree this year because of such a slowdown in Alberta.

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Hon. D. Miller: Well, the commission has offered . . . . I think they're working with the consumer taxation branch. I mean, something as simple . . . . We talked earlier about the interagency cooperation and planning around highways and the commission. And in a similar vein, the commission is in a position to know where the activity is taking place and to make sure that the consumer taxation branch is aware of that.

I suppose it's fair to say there may always be some slippage, even with the best regime. We want to certainly have that at a minimum. Again, I don't know that the solutions are necessarily simple. But the commission will play an active role to try to assist to ensure that British Columbia's fair taxes are collected from those who come into British Columbia to work and that our laws are gene