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)

WEDNESDAY, APRIL 7, 1999

Afternoon

Volume 13, Number 24

[ Page 11659 ]

The House met at 2:08 p.m.

Prayers.

C. Clark: Hon. Speaker, I am very honoured today to introduce a man who made a real difference in my life, who shepherded a generation of Burnaby kids through Burnaby South -- including all my brothers and my sister. He's a real example of what great things a teacher can do -- I guess maybe not in my case but in some others. He's here with some guests from California, from Vancouver and from . . . elsewhere in the world. [Laughter.] He didn't do much good with my memory! Fred Lupkin, "Mr. Burnaby South" -- I hope the House will make him welcome.

Hon. U. Dosanjh: I have the pleasure of introducing to the House grade 11 students from Sir Charles Tupper Secondary School, with Mr. Dougall and Mr. Stasinopolis accompanying them. Would the House please make them feel welcome.

M. Coell: I have the pleasure to introduce two friends to the Legislature today. In September 1997 the town of Sidney hosted the World Town Criers Competition. Ken Podmore came from Great Britain, and he liked Canada so much that he stayed. He's with us again today; with him is Gary Saville. Would the House please make them both welcome.

Hon. J. Pullinger: I have the pleasure today of introducing two people who are visiting the Legislature. The first is Mary Flynn, who is the executive director of the Cooperative Housing Federation of B.C. We've had a very enjoyable relationship with the Cooperative Housing Federation, and I'm delighted that Mary is visiting here today. The second person is Sheryl MacDonald, who is working in my office and is part of a very effective and efficient team. She's watching the legislative proceedings for the first time today, so I'm delighted to welcome her as well.

[1410]

P. Calendino: I'd like to add my welcome to Mr. Fred Lupkin, an old friend of mine as well. But I'm here to introduce a recent friend of mine, a young lady who came to Canada a few months ago and has stayed in Victoria for the last few months but is moving to Vancouver soon. She's a makeup artist who has worked extensively with the Italian national television network. She has worked at La Scala in Milan and is here to take advantage of the booming film industry. She'll be looking for a job in the film industry in Vancouver. Would the House please make Ms. Debra Azzori welcome to Canada.

Oral Questions

PAYMENT FOR

MINISTER'S AND WIFE'S TRIP

C. Clark:

Section 7 of the Members' Conflict of Interest Act states that no member or member of that person's family shall accept a gift in connection with their duties as a minister. You'd think that if any member of this Legislature were familiar with that

section of the act, it would be the member for Esquimalt-Metchosin. But instead, the member has taken a four-day freebie into the wilderness with his wife, with a guide and with a cook, and failed to disclose any of it. Can the member tell us how it is that he took a trip with his wife and never disclosed it? And will he tell us exactly who paid for this whole deal?

Interjections.

The Speaker: Members, come to order.

Hon. J. MacPhail: Hon. Speaker, as Government House Leader, I rise to suggest that there are appropriate avenues for dealing with this issue, one of which is not question period.

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

C. Clark: The member has a duty to this House, to the Legislature, to the people of British Columbia to come clean about the freebies he's taken. If he will not do that in the Legislature, when does he think it's appropriate? When does he think it's appropriate to come clean about the freebies that he takes, the perks that he accepts, the things that he takes and doesn't disclose to the conflict-of-interest commissioner? Surely it's this venue in the House today.

I will ask my question again. The minister, when he was responsible for the Ministry of Environment, took a trip into an area that was under consideration for parks designation when he was responsible for making million-dollar decisions in that area, and failed to disclose it. Will he tell us today in this House who paid for his trip and who paid for his wife's trip? And why did he fail to disclose it as required under the laws of British Columbia?

The Speaker: Hon. member, perhaps the Chair was remiss in not drawing this to everyone's attention before now. But as far as I'm aware, the question does not relate to the minister's responsibilities on the executive council. I think that's a rule that is very much part of our operations here.

G. Plant: I have a question of a minister of the Crown relating to his obligations under the acts that apply to all of us, including ministers of the Crown, relating to a time when, on the evidence, he was apparently discharging his duties as a minister of the Crown.

Hon. Speaker, it's not an isolated incident. First, it was a few harassing phone calls to the Motor Carrier Commission. Then apparently there were some free ski passes and some heli-skiing, and now it's free back-country ski trips that aren't disclosed. It is all about choices, and the Minister Responsible for the Public Service keeps on choosing to show contempt for the obligations he has under the laws of British Columbia. So will he now, today, admit as a minister of the Crown that he has repeatedly broken trust with the people of B.C.? He has done that so many times even he must have lost count. Will he do the only honourable thing available to him: will he resign?

[1415]

Hon. M. Sihota: Hon. Speaker, out of respect for the rules of the House, what I do not intend to do is violate those rules and speak to a matter that falls outside my current

[ Page 11660 ]

purview. I do that -- and let's be very clear about that -- because I am concerned about the precedent that is set for all of my colleagues on this side of the House, if I were put in a position of having to answer questions for my earlier responsibilities.

However, I wish to inform the hon. members opposite that I will take the liberty, after question period, of making a short statement with regards to this matter, which I'm sure will totally clarify the issue. I know that . . . .

The Speaker: Minister, wrap up your remarks.

Interjections.

Hon. M. Sihota: Let me finish. Hon. Speaker, I know that this matter is of great interest to the members opposite, and therefore I expect them to be all ears at this point. I know that they have the opportunity to respond.

The Speaker: Minister, please just conclude your remarks.

Hon. M. Sihota: Let me wrap up by saying this. I know that they have the opportunity to respond. When they respond, perhaps they may want to advise the House of two things. First, why is it that they have not responded to my letter about who paid Kevin Falcon's bills when he was working for the Liberal Party in 1996? Secondly, I would encourage them to advise this House: why was it that a private sector developer paid for the cost of Liberal caucus members to go to Whistler in the summer of 1995?

The Speaker: I recognize for a first supplementary the member for Richmond-Steveston.

G. Plant: Well, yippee-ki-yi-yay! Git along little dogie, huh? That's great. Let's have a little accountability, but let's not have it now. Let's have it later.

Here's the point. The

section is as clear as clear can be.

Section 7 says you don't accept gifts or benefits associated with the performance of your office. Yet the facts indicate that this minister has repeatedly accepted those gifts and benefits. So my question is to the Premier: will he begin to restore some particle of integrity to his government by doing the right thing now and firing his minister?

Interjections.

The Speaker: Order, members.

Hon. G. Clark: This is what we've come to expect from the Liberal opposition. They have not a scintilla of evidence of wrongdoing on the part of the member, but they stand up in this House and . . . . Innuendo and rumour and attack -- they have not a scintilla of evidence, but it doesn't stop them. That's why we see the Leader of the Opposition making cruel statements; that's why we see hate-mongering; that's why we see rumours. That's why we see it, because they don't do any research. They don't know anything about what they're talking about. But they stand up here and attack a member of this House without any grounds for attack.

[1420]

G. Farrell-Collins: The fact of the matter is that the words of the minister responsible speak for themselves. He takes freebies all the time, and he doesn't think it's a problem. "As a minister of the Crown, it's okay to take that and not disclose it" -- those are the words of that minister, defending that pathetic Premier in his problems. Will that minister of the Crown do the honourable thing? Will he stand up and admit to his own words -- that he has violated the Conflict of Interest Act repeatedly? Will he stand up and tell the truth in this House?

Interjections.

The Speaker: Members, come to order, please.

Hon. M. Sihota: Some time ago, I had the opportunity to serve in opposition, a time which I'm sure I will never see again. But I always knew at that time that one would be in error to jump to conclusions and to make assumptions of fact which are indeed not true. I will take the opportunity after question period to make a statement on this matter, but I will not violate the rules in terms of ministerial responsibility. I would encourage all the members opposite to await that statement, to have the matter dealt with in the appropriate forum. This, unfortunately, under the rules, is not the appropriate forum.

I would expect greater respect for the rules from the members opposite than they are currently showing.

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

G. Farrell-Collins: Well, give me a break. Give me a break. I remember, too, when that member was on the opposition side. They went after Peter Dueck like a dog with a bone. He did the honourable thing, and he resigned -- something that minister doesn't know anything about. The pit bull's biting his own tail on this one.

Will the minister stand up and admit that his words short months ago, short weeks ago, that he always takes freebies . . . ? He can't remember whether or not he has heli-skied. He can't remember how many times he's taken freebies and on which ski hills in the province of British Columbia. Will he stand up and admit that he's been in a conflict of interest, that he's still in a conflict of interest and that he just doesn't understand the law or doesn't think it applies to him?

Hon. M. Sihota: I would forewarn the member opposite, with the greatest of respect, not to utter words which may come back to haunt him. The hon. member refers to a matter which his colleague from Burnaby Mountain has referred to the conflict-of-interest commissioner for an opinion. I'm sure that all members of this Legislature would benefit from an opinion from the conflict-of-interest commissioner and would all stand to learn from his understanding of the rules.

The member ought not to guess what the commissioner will say -- no more than I would endeavour to guess what he would say. I remain confident that there are no violations of the statute. I remain confident that the member opposite is wrong. And I remain confident that when he is proven to be wrong, he will apologize with regard to the words he put in my mouth relating to those ski trips.

[ Page 11661 ]

CASINO APPLICATION APPROVAL PROCESS

J. Weisgerber: My question is to the Minister of Employment and Investment. One condition for a casino licence is financial strength and capacity. Yet two aboriginal applicants -- the Casino of the Rockies and the Coquihalla casino -- were granted approvals, even though their lender, Trillium Gaming of Ontario, was charging interest in excess of 35 percent per annum. What background checks has the minister made with respect to the lender and its sister company, the Navegante Group of Las Vegas, who are listed as the casino operators in both of those casino applications?

Hon. M. Farnworth: In the case of both of those proponents, they were assessed on the basis of the criteria that were developed over a number of months, going back to 1997, and by a group of 12 people in terms of the financial strength of each of the proposals. Those proposals were scored independently. The two proposals were lacking in a whole series of areas. The winning proposal, which was the one that was chosen, in the Kootenays, had entered into an agreement with the proponent whose financial backing is Trillium from Ontario.

[1425]

Their proposal scored the highest of the four proposals that were in the Kootenays, and they underwent all the necessary background checks. They were the best proposal by far, and that's why they received approval in principle. At this point in time, they are trying to negotiate an agreement with the B.C. Lottery Corporation. That has yet to be achieved, and as such, there has yet to be a licence issued.

The Speaker: First supplementary, the member for Peace River South.

J. Weisgerber: My supplemental question is to the Premier. We have licences for proponents with inadequate financial resources. We have approvals to people who operate illegal gambling clubs, strip bars and lewd web sites. This is an open invitation to organized crime, and I fear that gangsters everywhere will be packing up their violin cases and moving to British Columbia.

Interjections.

The Speaker: Members, order, please. The member has not completed his question.

J. Weisgerber: Thank you, Madam Speaker. I know the opposition finds that concept humorous. I don't. I think it's a very serious concern.

My question to the Premier is: has he decided to revoke all of these conditional approvals and put a moratorium on expanded gambling in this province until such time as he and his government can develop an adequate and transparent review and approval process here in British Columbia?

Hon. M. Farnworth: I expect the type of hyperbole that the member was engaged in from the official opposition, not from him.

What I would like to say is that there is a process in place -- a White Paper that is out there, with an extension till April 15 -- where people can raise concerns about issues related to all the gaming problems or gaming issues in British Columbia, that can deal with the whole wide spectrum, whether they relate to charities, to local governments, to the role of GAIO or to the role of the RCMP. It'll cover a whole spectrum.

So my suggestion to the hon. member would be to take advantage of that opportunity and to bring forward constructive suggestions that he thinks need to be incorporated into gaming legislation in the province. If he does that, they will be reviewed; and if they're positive, they could be incorporated. As he well knows, there have been many times when he has brought suggestions forward, and they have been dealt with and incorporated. I would encourage the hon. member to do that.

The Speaker: The bell ends question period.

Ministerial Statement

PAYMENT FOR MINISTER'S

AND WIFE'S TRIP

Hon. M. Sihota: During question period certain matters were raised by the members opposite, as it is their duty to do. It's also my duty to respect the rules as they relate to question period. I chose at the time not to respond to those questions, as I indicated, out of respect for the rules that govern this chamber.

Hon. Speaker, the hon. members opposite, during the course of the question period exchange, alleged that I was in receipt of a gift which was undisclosed. It's my understanding that they're referring to a gift in the form of a trip that I took to the Spruce Lake wilderness area when I had the privilege to be Minister of Environment for this province. I want to make it clear that I was at no time in receipt of a gift. As the members opposite noted, the provisions of the conflict-of-interest statute require disclosures of gifts and, in some cases, have a prohibition upon the receipt of gifts.

Perhaps it's not fully understood by all members opposite that one ought to make a distinction between a gift and a ministerial expense. I want to take this opportunity to highlight that point so that the members opposite and all members of the House appreciate that very important distinction.

The trip in question was not a gift or, as the member opposite referred to it, a freebie or a free trip. It was a ministerial trip in my capacity as Minister of Environment at the time. In fact, to make the point clear, I was accompanied by staff from the Ministry of Environment during the course of the opportunity to go and visit the Spruce Lake area. I attended the area . . . .

[1430]

Interjections.

Hon. M. Sihota: If the hon. members would just wait, I'll deal with all of the issues.

I was accompanied by staff to assess the viability of converting the area in question into a provincial park. A site visit, in my opinion -- and it was my judgment as Minister of Environment -- was required. It was required for the following reasons. There were a range of land use conflicts with regard to the area in question. There were a number of con-

[ Page 11662 ]

cerns raised, first of all, by forest companies which wanted access to the forest resources in that area. Secondly, there were a number of outstanding mineral claims that wanted to proceed with regard to mineral activity in the region. Third, there were a number of demands by the cattle industry to open up that area for grazing, for which it is actually, quite frankly, naturally suited. And in my view, very importantly, there was a demand by the environmental movement that the area be protected in its entirety and converted to a park.

From my recollection, the reason why the environmental movement felt so strongly about protecting that area was because it was the number one recommendation for a park in that area. The southern Chilcotin Range and that region of the province had not had much in terms of protected status, and a parks designation process started by the then Minister of Parks, Mr. Huberts, had identified that as the top area for a park.

It was my judgment, given the individuals involved and the demands from the environmental movement, that the area had the potential to be another Clayoquot Sound. Because of my concern, I therefore thought a trip would be appropriate. That trip was paid for, in terms of my expenses and those of staff, by the taxpayer, as is the case for any ministerial trip anywhere when one is on ministerial duty.

My spouse did join me on that trip. Spouses are entitled to join ministers on travel. I know of no prohibition that prevents a spouse from joining a minister on a trip, at their expense. I was advised at the time that a formula is developed by the ministry which allocates the cost to a spouse for the portion of their travel and accommodation expenses. Either the ministry pays the travel bill and is reimbursed for the spousal portion, or it pays the bill less the portion, and the minister makes up the difference.

I have asked that the appropriate paperwork be forwarded to me so that I could advise the members opposite and all members of the House as to the way in which that aspect of the matter was attended to.

I want to make it clear that this was not a gift; that this was not a free trip; that this was not an item that falls, in my view, under the provisions of the Conflict of Interest Act; that this was a ministerial trip, one on which I exercised my judgment and which I felt and still believe very strongly to this day was necessary for me to carry out my duties as Minister of Environment.

I trust that clarifies the matter appropriately for all members.

The Speaker: In reply to the ministerial statement, I recognize the member for Port Moody-Burnaby Mountain, who will, I'm sure, proceed to make remarks with great care.

C. Clark: There are three issues with respect to this matter that the minister needs to settle, one of which he has attempted to settle today. The first is: was his trip paid for by his ministry? That was the first question that required an answer. The minister said it was ministerial travel, it was paid for by the ministry, and I assume the minister will forward the documents to prove that to us.

The second issue, though, which the minister has not answered very clearly in his statement today, is his wife's travel. When his spouse travelled with him, if he did not pay for that travel, then that is a conflict of interest. What the minister has said in the House today, and I want to be very clear about this, is that he will forward documents which show us -- what? Which may or may not show us that he's paid for them? That's the second issue that needs to be settled. Did he pay for his wife? Did he fully reimburse the ministry for that?

The third issue that very clearly needs to be settled here is: why was none of this ever disclosed? If he did not pay for his wife, that also required disclosure to the people of British Columbia.

Hon. Speaker, in this House the reason we have a Conflict of Interest Act is so we can assure the . . . .

Interjections.

The Speaker: Members, order, please.

[1435]

C. Clark: Ministers in this House make million-dollar decisions every day with the stroke of a pen, and they affect everyone in this province. The reason we have conflict-of-interest rules in this chamber is so that the public can be assured that ministers are making all of their decisions entirely free from any undue influence from any outside parties. This minister has, in the past, given rise to the public perception that he may not have met the standards required.

What we are asking today is that the minister come clean about every aspect of this trip and that every document, every receipt, be forwarded for public review, so that the public can make a final decision about whether this minister has lived up to his duties to the people of British Columbia.

The Speaker: The member for Vancouver-Little Mountain rises on what point?

G. Farrell-Collins: It's a point of order. I'm raising it after question period. In his comments in question period, the member opposite, the minister for whatever it is -- Public Service now -- stated that the Liberal opposition had gone to Whistler at the expense of a private developer in 1995. That is simply not the case. The member knows that, and I demand that he withdraw that comment.

Interjections.

The Speaker: Members . . . . I recognize the Minister of Finance.

Hon. J. MacPhail: Hon. Speaker, I fail to see the point of order in that particular allegation.

The Speaker: Members, having heard both . . . .

The member for Vancouver-Little Mountain has another comment to make.

G. Farrell-Collins: I find those words offensive, and I ask the minister to withdraw them.

The Speaker: The point that was raised by the member for Vancouver-Little Mountain was in fact not a point of order. It was a disagreement on a debating point. So thank you for that.

[ Page 11663 ]

G. Farrell-Collins: Then, if it's not a point of order, I reserve my right to raise a matter of privilege regarding the member opposite misleading this House.

Orders of the Day

Hon. J. MacPhail: I call Committee of the Whole to debate Bill 51.

[1440]

NIS G A'A FINAL AGREEMENT ACT

( continued )

The House in committee on Bill 51; W. Hartley in the chair.

On the schedule,

chapter 5 (continued).

G. Abbott: To return to the sections in the Nisga'a agreement where we left off yesterday, for the thousands and thousands of people at home who are watching this gripping debate on the Nisga'a final agreement, we are in the forest resources

section on

section 14. We were talking last day about the reasons why the Nisga'a Lisims government have been empowered with the opportunity to make laws compatible with provincial laws in respect of scaling. We dealt with that question, I think.

The first question I have is related to

section 14. Should the Nisga'a be able to acquire an additional forest tenure, either from the Crown or from an existing license, would the Nisga'a laws in respect of timber scaling apply to that new licence, or would the laws of the province of British Columbia apply?

Hon. D. Zirnhelt: The laws of the province of British Columbia would apply to licences off Nisga'a lands.

G. Abbott: I'm sorry, I missed the latter part of that.

[1445]

Hon. D. Zirnhelt: The answer is yes. To clarify: for any licence that they hold off Nisga'a lands -- that is, on provincial Crown lands -- the provincial laws apply.

G. Abbott: I thank the minister for that clarification.

Section 15 picks up on, I guess, a similar point. It states:

"If Nisga'a Lisims Government makes laws under paragraph 14, Nisga'a Lisims Government will, on or before March 31 of each year, provide to British Columbia a report on the volume of timber harvested during the preceding year from Nisga'a Lands, by species, grade, and timber mark."

The companion provision in the

schedule of appendices on page 394,

section 75, states:

"British Columbia will provide the Nisga'a Nation with quarterly reports on the volume of timber harvested from Nisga'a Lands by timber mark, specifying:

"a. species and grade;

"b. scale date; and

"c. billed stumpage."

Now, am I clear in understanding that if the Nisga'a create their own scaling system, they will be providing a report to British Columbia, and if the timber-marking scaling system of British Columbia is used, then British Columbia provides the report? What is the relationship between those two elements?

Hon. D. Zirnhelt: The Nisga'a would have to provide us with data, as any other utilizer of timber would, so that we could prepare a report -- that is, if they don't use their own system. Should they have their own system, they would then report as in the section.

G. Abbott: Again, I think this goes back to the issue which we raised yesterday about potential confusion which may result from having a new scaling system introduced for a particular corner of British Columbia. Is it the expectation of the Ministry of Forests, the Minister of Forests or the government of British Columbia that should the Nisga'a adopt their own system, they would also supply to the ministry some formula or means by which the Nisga'a scaling system could be readily translated into a meaningful figure for the ministry's consideration?

Hon. D. Zirnhelt: Yesterday we used the words "compatible system." To what you asked my answer would be yes, because we said the systems had to be compatible.

G. Abbott: We did have that discussion. I think the conclusion we came to was that they would be compatible but not necessarily identical. If they're not identical, presumably there is going to have to be some provision made either by the ministry or by the Nisga'a so that apples can be compared to apples, oranges to oranges and so on. I mean, depending on . . . . I have no idea how different a system of timber scaling they could arrive at. But the question is: if they do arrive at that different system of scaling, is it going to be the responsibility of the Nisga'a to provide the necessary means -- whether it's a formula or other means -- to make the proper and appropriate comparisons?

Hon. G. Wilson: I fail to see where we're going with this line of questioning. Why would the Nisga'a set up a system that isn't compatible, that doesn't work within the mainstream system? They're going to market timber in the same marketplace; they're going to harvest it in the same way; they have to use the provincial seal. All of the data here says they're going to set up a system that gives them the economic opportunity to be able to compete within a standard system of marketing. So why on earth would they set up something that would somehow be dramatically different from everybody else?

It makes no logical sense. Given the fact that the language says it will be a compatible system, why would the member opposite think for a moment that the Nisga'a wouldn't do exactly as the language of the treaty suggests they will?

G. Abbott: Obviously the minister must have missed the debate yesterday. That was our question: why introduce a new scaling system? If the intention is to have a system that is so compatible that it is virtually identical, why put forward the opportunity -- as it specifically does in

section 14 . . . ?

Hon. G. Wilson: We answered all of this yesterday. They're not setting up a new system. The Nisga'a are doing the scaling, and they are doing it in a compatible way; that's it. The only thing that's complex about it is what is envisaged in

[ Page 11664 ]

the minds of the members opposite, who somehow think this is going to do something drastically different than is standard practice in British Columbia -- which is not the case.

Interjection.

[1450]

G. Abbott: I don't aspire to be a lawyer, in fact. I'm simply trying to understand an agreement. When there is a provision in the agreement that says, "After the transition period, Nisga'a Lisims Government may make laws compatible with provincial laws in respect of timber scaling," I think it's reasonable to ask questions about it.

If the minister is sensitive to us asking questions, he should find himself a new line of work, because we're going to be asking questions like this right through. If he has a problem with that, he should find himself a new line of work, because we have to ask these questions. If we are creating an opportunity for a new way to deal with scaling . . . . I think the Minister of Forests was about to answer this question before the rather useless . . .

G. Plant: Unhelpful.

G. Abbott: . . . unhelpful interjection of the Minister of Aboriginal Affairs. The question is a simple one: if there are differences in the way in which scaling reports are presented or arrived at, are the Nisga'a going to provide the Crown with ways to readily translate that into an apples-to-apples, oranges-to-oranges comparison? I think the minister was about to answer.

Hon. D. Zirnhelt: I was about to repeat, perhaps on a

summary basis, what I'd said before. The Nisga'a wanted this power in the treaty. It didn't make any difference to the province, as long as the system was compatible. So as a result, we're prepared to accept that they will develop a system -- or we can enforce a system -- that's compatible with ours. Therefore we get the data, and the timber is controlled and marked. We can count it, and we know where it's going. So the provincial interest is safeguarded and the economic interests in the area are safeguarded, and we're satisfied that that's built into this treaty.

G. Abbott:

Section 16 reads: "Provincial laws in respect of timber marks apply to timber harvested on Nisga'a Lands." I assume that the reason for the provision of this is straightforward: to provide the Crown with an opportunity to follow the flow of timber in an orderly fashion without any sort of system in place. I assume that the minister would answer "correct" to that straightforward question.

Before we leave the "Applicable Laws and Standards" section, I want to ask a couple of questions of a broader character. In a briefing prepared for the Deputy Minister of Forests on January 26, 1998, there is a note that "legislative changes will be required to meet commitments of the transition period and after the transition period. Although the forest

chapter of the final agreement that is still under negotiation is clear, substantial changes will be necessary to the Ministry of Forests legislation." Could the minister outline for me the provincial statutes that will require changes or amendments as a consequence of this agreement?

Hon. D. Zirnhelt: Well, at the time of the briefing note it was unclear, because the final agreement hadn't been inked. We didn't know which laws would be finally affected. So what this piece of legislation does is give effect to the consequential amendments. This consequentially amends the pieces of legislation, and I believe it's referred to in the legislation itself when it refers to a

section of

an act that needs to be changed.

G. Abbott: Thank you for that clarification. I assume from that that there will be no requirement for additional legislation pursuant to this agreement to be introduced in the spring session of the Legislature. Or will there be a range of legislation consequential to this agreement that will be introduced into the Legislature in the spring session?

[1455]

Hon. D. Zirnhelt: Well, I'm informed that these are the changes here and that we don't anticipate other things. However, some things may have been unforeseen; but at this point legal counsel advises us that this is it.

G. Abbott: Moving on to the "Timber Harvesting"

section and specifically timber-harvesting rates as set out in

section 17, the annual allowable cut is estimated for the 2,002-square-kilometre area at 220,000 cubic metres. I am assuming that in the view of the ministry, that 220,000 metres is regarded as a sustainable long-term annual allowable cut for that area. Is that correct?

Hon. D. Zirnhelt: The amounts in

section 17 are the amounts that were negotiated -- 165,000 . . . . The 220,000 is just some kind of an estimate, but without the benefit of the determination by the chief forester.

G. Abbott: From the different documentation that I have seen, I think 220,000 cubic metres seems to be the generally accepted figure with respect to a sustainable long-range cut for that area. Was the estimate of forgone revenue that is associated with this agreement based on a 220,000-cubic-metre annual cut?

Hon. D. Zirnhelt: Yes, it was based on the 220,000.

G. Abbott: So I assume that if the Crown was basing its estimate of forgone revenue, for the purposes of this agreement, on a 220,000-cubic-metre annual allowable cut, in the best estimate of the chief forester and/or of the ministry, 220,000 cubic metres annually is the long-range sustainable cut that would be available in that area. Is that correct?

Hon. D. Zirnhelt: Those amounts are in the socioeconomic study. They were estimates that were used as the basis of the negotiations with the federal government and, subsequently, with the Nisga'a. So we won't know the final effect until there is a determination by the chief forester. I just caution you, in that there was a higher-than-sustainable rate of cut in that area for some time. It was up to 236,000. So the long-range cut on that land base will have to be determined by the chief forester.

G. Abbott: As this agreement took shape, decisions were obviously made to permit the AAC to be reduced down to the 165,000-cubic-metre level for the first five years of the agreement. I think we've had some sense of why the cut, the AAC, was negotiated down for those years. I think it relates to an

[ Page 11665 ]

earlier discussion we had about the Nisga'a having potentially different values for forest lands than what the values may have been previously, and that it was the Nisga'as that wished to see the reduction in the annual allowable cut from the 220,000-cubic-metre range down fairly substantially for the first five years to the 165,000-cubic-metre range. Is that a fair assessment of how the decisions around AAC evolved, or are there aspects of this which I'm not aware of and which the House should become aware of?

[1500]

Hon. D. Zirnhelt: Yes, in general terms.

G. Plant: I want to ask a question to make sure that -- I guess, for want of a better expression -- we are comparing apples to apples. A moment ago, the minister used the figure 236,000 cubic metres as being a high point for allowable annual cut. When we're looking at paragraph 17, we're looking at the rate of harvest on Nisga'a lands outside former Nisga'a Indian reserves. My understanding is that there has been, and there continues to be, timber harvesting on what are now Nisga'a Indian reserves.

I take it that whatever the rate of harvesting is on Nisga'a Indian reserves, it's not included in either the 220,000-cubic-metre figure that gets used or the minister's 236,000-cubic-metre figure. Is that a fair assumption?

Hon. D. Zirnhelt: I want to correct the record. In '94, the highest rate of cut was 268,000. So it's been that high, but in recent years -- '96, '97 -- it was down to 81,000. That was the rate of cut. So the rate of cut has been all over the place. But no, it doesn't include Indian reserves.

G. Abbott: In terms of maintaining the annual allowable cut at particular levels, there is, in at least one of the documents, reference to the importance of the extraction and sale of timber resources providing the basis for the fiscal health of the Nisga'a people. Can the minister give us some sense of what importance the province attached, in these negotiations, to maintaining the cut-level, in order to ensure that the province's position with respect to future fiscal agreements was protected?

Hon. G. Clark: If you don't mind, I wouldn't mind answering this question. There's no question that there's a difference of opinion between the government negotiators and the Nisga'a with respect to timber harvest. You've touched upon that. But I think it's important to put into context and on the record . . . . I think Frank Calder is here, so he'll remember this. The Social Credit government and sympathetic administration -- something which would no doubt return if you ever came on this side of the House -- liquidated Nisga'a lands.

They allowed private companies to come in there and clearcut Nisga'a lands in the middle of negotiations with the Nisga'a people, in what was just a travesty. It's unbelievable, what happened during the period of the early eighties with the Social Credit government. The Nisga'a hired Herb Hammond, who came in and did a review and did a very thoughtful . . . . He exposed, really, the scandal that was sympathetic administration. The Nisga'a were a part of exposing that practice by the government. Really, we still live with some of the consequences of sympathetic administration.

The Nisga'a therefore developed, with Herb Hammond's assistance, a very detailed forestry plan which involved radical reductions in timber harvest. I think it's fair to say that this agreement and this transition is a negotiated settlement which is higher than the Nisga'a would have liked in their bargaining position and somewhat lower than the province's desire to maintain the cut at what we believe to be a sustainable level and one which would maintain an income flow and jobs associated with it.

We've worked on a transition strategy which is more to the province's position than the Nisga'a's position. After that transition period, the Nisga'a will be free to manage that land in the way they wish. But we should be clear, for the record, and everybody should know that it is their intention -- stated repeatedly for 100 years, but particularly for the last 20 -- that they believe that current forestry practices in British Columbia are not sustainable for forestry purposes or for other values. They believe that very strongly, and it's a very key part of the negotiations, which is why it's here.

[1505]

Clearly, as part of the financial health of the Nisga'a nation, as part of the job opportunities, forestry becomes a key component for them. They see forest job opportunities not just in the traditional clearcut method which most forest companies pursue in British Columbia and which the government sanctions in many respects; they see forestry practices in new forestry, in value-added, in artists' work, and they also see other values besides financial values in their

interpretation.

In terms of your line of questioning, I've just tried to put a broader context to it. It was a key part of the negotiations. It is a difference and remains a difference -- between the Nisga'as' view of the forest land base and their economic opportunities and the province's view in negotiations. We think we did a good job, certainly in the transition period, of managing the fibre flow and of making sure that current mills are occupied. But we should be under no illusions. For the record, the Nisga'a want to pursue different approaches to forestry after the transition period.

G. Abbott: I thank the Premier for his intervention, because I think it does highlight a couple of points which we have been trying to pursue here in the discussion of the agreement. What we've been doing, particularly over the past day -- a little bit more than a day -- is trying to get a good sense of what the process is going to be around ensuring that no group, whether it's the truck loggers or the existing licensees in the area or others who might be adversely affected, bears the brunt of treaty conclusion themselves.

So I'll ask the Premier this, as he's introduced it: again, in respect of their views around the reduction in fibre flows to mills -- which may be prompted by the Nisga'a view that even at, for example, 125,000 cubic metres we are overcutting the forests -- if after year 10 or year 9 the Nisga'a conclude, rather, that the annual allowable cut should be at zero cubic metres or 50,000 cubic metres or whatever they choose, is it the Premier's view that therefore the licensees should be appropriately compensated -- certainly in the area?

Hon. G. Clark: No. After the transition period, I believe, it's down to 130,000 cubic metres; that's the agreed-upon . . . . It's my understanding -- as I recall, anyway -- that the Nisga'a believe that this is the sustainable number, so it's likely that it is going to be the sustainable number. They will have the same right that any private owner of forest land would have, which is to increase it somewhat, provided that it

[ Page 11666 ]

meets the provincial standards, or reduce it. That's correct. In this treaty we cannot -- I believe, at least -- guard against every future scenario with respect to the forest land base in this region. We've got a long phase-in period. At the end of that phase-in period, it's 130,000. We compensate for that. We anticipate that it's a level sustainable by the Nisga'a, who said that's their sustainable level.

We think it's higher, and we're quite up-front about that. I believe that the Nisga'a will have revenue requirements and all the other things that come to bear, as any owner would, to maintain the harvest at 130,000. It's their stated intention. I believe that's what will happen -- maybe a little higher, based on future yields and work, etc. But the member, I think, can be correct in saying that after that period of time, it's possible to be lower. I think it's highly unlikely. But they would have the ownership rights to do what they wish.

G. Abbott: I'll pose this question, as well, to the Premier: is there any good reason why a licensee whose economic position may be greatly jeopardized by the direction of timber harvesting, particularly after year 9, should make anything other than the more pessimistic assumptions about what those cut levels will be?

Hon. G. Clark: No, we negotiate compensation based on this agreement. We anticipate that it will be 130,000. Can we guard against what happens in the future? The answer is no, not entirely, other than what we believe to be the case with respect to the Nisga'a's intention.

I mean, if there's beetle-kill on Nisga'a lands, will they harvest more? Maybe they will. If there's new technology that grows trees faster, will they increase harvest? Perhaps they will. If there's fertilizer or silviculture work they can do, perhaps it will be higher. We cannot have a treaty -- or, really, we cannot manage the forest lands -- based on every possible assumption for future scenarios. We do the best we can; we generally do. But as the member knows, even on Crown lands, that number changes, based on periodic reviews by the chief forester and based on different practices, different technology, different science and different social mores. That will be the same for the Nisga'a.

[1510]

G. Abbott: Before I return to the line of questioning I was engaged in when the Premier made his intervention, I just want to get one more thing clear for the record with the Premier. He mentioned some of the overcutting that had occurred on Nisga'a lands in earlier decades of this century, and I have no reason to question that, although I certainly am not knowledgable about that area of our history. But I do want the Premier to just clarify or confirm that in his view an annual allowable cut of 220,000 cubic metres per year, as has been the case through the 1990s, is not an example of the dramatic overcutting which the Premier discussed earlier in his comments.

Hon. G. Clark: Well, the problem is -- obviously I'm not qualified as a forester, either, on these questions, but let me . . . . I think the problem with trying to give you a definitive answer is this: the chief forester does not decide on the annual allowable cut based on the Nisga'a lands; it's based on a much bigger area, and really a lot depends on what's going on in the other areas. And as you manage a large piece of land on the basis of annual allowable cut, you do take into consideration the characteristics of that land base but also different decisions that are made and different rates of harvesting at different times.

This is part of the dilemma, generally, of forest management, where companies tend to want to go where it's cheaper in the beginning. Even though the annual allowable cut is the same, the cost could rise dramatically over time as they go to farther and more difficult lands. So to isolate out the Nisga'a land and say that it has an annual allowable cut of 220,000 is extremely difficult to do, which is why the Minister of Forests said it's an estimate. It's a general estimate based on the overall harvest in that area and what could and should come off that land when integrated with the broader management plan for the area.

I think it's fair to say that the science we rely on does believe that the annual allowable cut in that area could be somewhat higher than the 130,000 at the end of the transition period. How much higher, actually, we don't know -- I don't know. But there's some sense that they're managing from a very conservative perspective with respect to the future viability of that land base. We've agreed to that, and this was a long transition period. Of course, we anticipate that that will continue.

G. Abbott: I don't disagree with the Premier's comments. We've had that discussion around how it's an estimate. I just wanted to clarify for the record that when he was, for example, referring to sympathetic administration, he wasn't referring to, say, a government in British Columbia earlier in the 1990s or the view of the chief forester that 200,000 might be a fair estimate of the annual allowable cut -- that we weren't referring to that period of time as a time at which overcutting of those lands was occurring. Is that correct?

Hon. G. Clark: Fair enough. Yes.

G. Abbott: To return, then, to some of the questions I have around the timber-harvesting rates, what provision is there in years 1 to 9 of this transition period . . . ? We see the AAC going from 165,000 in years 1 through 5, down to 135,000 and ultimately down to 130,000. What portion of the annual allowable cut through that period is the small business forest enterprise program?

[1515]

Hon. D. Zirnhelt: The answer is none on Nisga'a lands.

G. Abbott: So I'm to understand, then, in terms of what was a 220,000-cubic-metre annual allowable cut, that through the nine years after the effective date there will be no small business forest enterprise program operating or taking any share of those cubic metres of annual allowable cut?

Hon. D. Zirnhelt: There may be, in effect, outside the Nisga'a lands. But the cut will be diverted away from Nisga'a lands, so there will be no small business cut on Nisga'a lands.

G. Abbott: The issue of the small business forest enterprise program was obviously a fairly important one for the Crown, or the province, as they pursued the negotiations. Again, to refer to a briefing note on this subject, it looks like the name of the recipient has actually been whited out. But I'll read it nonetheless. I presume it's to the deputy minister.

[ Page 11667 ]

"The AIP provides for the continuation of forest development plans of licensees with operations on Nisga'a land for five years following the effective date. The provision resulted in final agreement provisions regarding licence arrangements for the affected major licensees. The province and the Nisga'a have been at odds as to whether or not this provision includes the forest development plans of the small business forest enterprise program. The SBFEP in the Kalum district currently has plans to sell about 10,000 cubic metres per year over the next five years."

Has the direction of the province in this respect been that . . . . ? I gather the Nisga'a had concerns. In fact, at some point in here I think the briefing note talks about how the Nisga'a aren't accepting of the small business program. Has the position of the province been that they have simply moved all of the small business plans outside of that area in response to the Nisga'a concerns around the small business program?

Hon. D. Zirnhelt: The small business program planned its activities outside the settlement area.

G. Abbott: So the treaty as we see it, then, has not had an impact on the small business program. Prior to this final agreement, there were no plans for small business harvesting within the areas which we have been describing as Nisga'a lands. Is that correct?

Hon. D. Zirnhelt: Yes. There are none operating on Nisga'a lands that will be affected. But there may be some operating off Nisga'a lands, because it's part of a large area, and there may be a consequential reduction in the apportionment for small business as a result of the AAC determinations.

G. Abbott: I appreciate the minister's answer; it does clarify a point.

The briefing note goes on to say: "The provincial . . . . " This is a typo, I think; the author intended to say "the province."

"The [province] proposed to the Nisga'a that the Nisga'a run the SBFEP during the transition period but that they must sell timber sales competitively and allow SBFEP registrants to compete on these timber sales. This would provide the Nisga'a with capacity-building, contracting opportunities, full market value for the timber, and would not require further investment from the SBFEP account on Nisga'a lands following the effective date. Nisga'a have rejected this proposal and continue to indicate that they are interested in capacity-building and in providing direct logging contracts/jobs for Nisga'a loggers."

[1520]

Can the minister tell us why the province's suggestion with respect to the small business forest enterprise program was not viewed positively, apparently, by the Nisga'a in this negotiation?

Hon. D. Zirnhelt: Well, in the negotiations the Nisga'a wanted to control economic enterprise on their lands. They just weren't, for whatever reason . . . . In addition to continuing to build their own capacity, they weren't prepared to accept that. Since we could accommodate the small business forest enterprise program off the Nisga'a lands, because it's only 5 percent of the cut, we felt comfortable that the impact would be minimal.

G. Abbott: Can the forest transition committee authorize cut levels above what are stated here, for any reason or under any circumstance?

Hon. D. Zirnhelt: These numbers are subject to the cut control. In the cut control provisions, it says they have to be plus or minus 50 percent in any given year and zero at the end. The average has to be . . . . Take the five-year average, and that's what it has to be. But in any given year, it's similar to the provisions we have: 50 percent, plus or minus.

G. Abbott: The minister's response leads into the important issue of cut control, and I do want to clarify a point. Again, the question is prompted in part, at least, by a briefing note prepared for the deputy minister and, we should note, obtained through our freedom-of-information provisions rather than through any other nefarious route. I'll give you the quote here, because I think it leads to an important point:

"Three of the four licensees -- including the SBFEP harvesting on Nisga'a lands during the transition period will be harvesting 15,000 cubic metres per year annually or less. For these licensees, the province has proposed periodic cut control -- plus or minus 10 percent at the end of five years. The other licensee, Skeena Cellulose, will be harvesting in excess of 100,000 cubic metres per year. For this, the province has proposed annual cut control -- plus or minus 50 percent annually and plus or minus 10 percent at the end of five years.

"Previous direction from ministry executive was to negotiate cut control provisions consistent with the Forest Act. The Nisga'a have rejected this proposal, stating that they want no more than 100 percent of the total five-year AHL harvested from Nisga'a lands. The Nisga'a have also expressed concern that the licensees may delay harvesting until the later part of the transition period and insist that the licensees must be ramping down operations in years 4 and 5, not ramping up."

Now, I guess the first point is . . . . I'm going to assume that when there's a reference in here to the small business forest enterprise program, that really reflects, probably, the early date of this briefing note. Obviously the small business forest enterprise program has been shifted out of the picture as of this point, and those activities have been shifted to lands outside the 2,002 square kilometres.

[1525]

The other points, though, that are prompted by the briefing note . . . . First of all, will the annual cut control mechanism be in place for all of the licensees? Or will there be periodic cut control -- that is, plus or minus 10 percent at the end of five years? Will that be in place for some of the licensees with annual cut control in place for, I guess, Skeena Cellulose and perhaps . . . ? I don't know if there are any others that will be subject to annual cut control provisions.

Hon. D. Zirnhelt: It applies to all of the provincial licensees, and the amount is plus or minus 50 percent in any given year but zero over the five years. That's for all the licensees that are controlled under the treaty during the transition period by the province.

G. Abbott: That's a useful answer. Obviously the Nisga'a were very concerned in the negotiations that no licensee exceed 100 percent of the annual harvest level over the five-year period. What will occur . . . ? Are there any . . . ? Well, let me phrase it this way. What are the controls and what are the penalties for undercutting and overcutting during the transition period?

Hon. D. Zirnhelt:

Section 21(

a) says that any overcut or accumulated undercut will be deducted from the licensee. So

[ Page 11668 ]

the penalty is that you lose what you haven't cut. Or if you've overcut, then it gets deducted from what you can cut in subsequent years.

G. Abbott: The issue, though, is that in fact the licences are lost at the end of the transition period. What are the . . . ? Assuming that at the end of the transition period we find, through whatever mechanism, that in fact one of the licensees has cut either 95 percent, let's say, or 105 percent of the cut that they were granted . . . . Now, I assume that in the case where they have only cut 95 percent of what they were permitted, that would be no big deal to the Nisga'a. The apparent preference is a reduced cut, in any event -- although the minister can correct me if that's not the case.

But in the case of an overcut of, let's say, 105 percent, where the licence is terminated in any event, what is the penalty in that case?

Hon. D. Zirnhelt: It's anticipated that prudence would be used, and that would say: monitoring through to year 5 and, virtually on a monthly basis or a continuing basis, as timber is scaled, getting it registered against the cut. As you get close to . . . you monitor the field operations to see how much residual cut there is in the forest development plans. The Nisga'a will have to watch, and British Columbia will have to monitor and do the computation. So it would be normal monitoring of the cut -- much as what happens today, I think -- but it's particularly important because the licences run out on that year.

The Nisga'a are free to renegotiate licences, or they may like the partnership that has been developed. But it will be through monitoring. The treaty part, I know, doesn't provide any additional penalty for an overcut that might happen in year 5.

[1530]

G. Abbott: The minister's suggestion is, I think, an appropriate one. In one of the notes, Skeena Cellulose suggests that they would not have a difficult time, over a five-year period, in coming very close to exactly 100 percent of their cut through that period.

There is, though, a continuing question for me here, and that is: who will be doing the monitoring? Is it going to be a joint thing, like the forestry transition committee, to do the job of monitoring? Or will the Nisga'a be doing it through their chief forester? Will British Columbia be doing it themselves? I'm curious as to what mechanism is going to be put in place to follow through on this.

Hon. D. Zirnhelt: There are two parts to the answer. If there are approved cutting plans . . . . Bear in mind that the cutting permits are approved jointly by the transition committee -- joint Nisga'a-province approval. If the Nisga'a approve a cutting plan and they happen to go over, they've authorized the overage on the cut. In year 5, as in every other year, they watch the approval of the permits.

Who's monitoring it? I imagine that it would be joint monitoring. But the province, which has an interest in the volumes coming out for the purposes of transition, will monitor the amount that's coming off as well.

G. Abbott: A last question on

section 17. I think in his comments the Premier had already really answered this question, but I'll pose it in any event, for the record: that is, is there anything in this agreement or any agreement which would limit the cut in any way after year 9 on those 2,002 square kilometres of Nisga'a lands? Is there anything to, for example, limit the AAC being anything from zero cubic metres per year to perhaps an unsustainable rate of 300,000 cubic metres a year? Is there anything in this agreement or anything else that would, for example, distinguish the position of the Nisga'a on their lands from MacMillan Bloedel on their lands or TimberWest on their lands?

Hon. D. Zirnhelt: There is nothing to control the volume, other than that they have to meet or beat the province's standard under the code. They can't cut in a way that violates the standards in our code.

G. Abbott: Clearly after year 9 the Nisga'a are on their own in terms of level of cut. The province has no role, advisory or otherwise, in suggesting that the cut may be too large, too small or otherwise. Presumably, the only direct interest the province might have in whether the cut was up, down or otherwise for the province -- and perhaps it would be an indirect one on the Forest Practices Code, meeting or beating the provincial code -- would be that it would have an impact on the fiscal financing agreements, which are to be periodically negotiated. Is that fair?

[1535]

Hon. D. Zirnhelt: That is correct.

G. Abbott: On to

section

Section 18 discusses the volumes which will be going to the holders of licences during the transition period. It ranges from 155,000 cubic metres in year 1 through to 125,000 cubic metres in year

Section 18 discusses in a global way the allocation of fibre. What are the specific allocation criteria which will determine the allocation, for example, of the 155,000 cubic metres in year 1?

Hon. D. Zirnhelt: There are two factors. One is whether or not any licensee is currently active on what becomes Nisga'a lands; that's a factor. The other factor is how easily they can be accommodated and what their wishes might be to be accommodated on what their wishes might be to be accommodated on other lands outside the Nisga'a lands.

G. Abbott: For the purpose of licensees attempting to make informed decisions about the expenditure of capital or provisions for employees, decisions about product lines and so on . . . . When they look at year 1 and see that 155,000 cubic metres will be distributed among those licensees that have held licences in this area, they will be looking at two things: whether they have been active in that area in current days and whether their cut can be made whole or compensated for outside of this agreement. Is that the case? Are those the two things and, I presume, the only two things that licensees should look at in terms of making those assessments?

Hon. D. Zirnhelt: Those are the two main considerations. There may be others, in which case, those would be brought to the table during negotiations with those licensees.

G. Abbott: Given that year 1 will commence on the effective date -- again, as we've discussed previously, yet to be determined but likely to be relatively soon after the agreement has been ratified -- what will be the process that will determine, for example, how much West Fraser might get of

[ Page 11669 ]

this or how much Skeena Cellulose might get of the 155,000? I presume something is going to have to happen in a fairly prompt fashion between now and the effective date in order for licensees to make a smooth transition into the transition

section of this agreement.

Hon. D. Zirnhelt: Licensees in the area have been planning with this in mind. We've known the land area base, so they have been submitting development plans that have gone through the interim protection measures process for approval. I'm told that there's probably . . . . Well, there's at least 150,000 cubic metres in approved cutting permits now. So I think the cutting rights will line up with the development planning activities that have recently taken place.

[1540]

G. Abbott: That's a very useful response from the minister. So in fact it's pretty clear to the existing and current licensees in the area what is going to happen, at least over the first five years, in terms of what their allocation of the existing fibre in this agreement will be -- where it's going to go. Looking at this from this vantage point, they have a very good idea of what they're going to be doing in years 1 to 5 and what the allocation is going to be. I don't know whether that's been formalized yet or not.

If there's been that much in cutting permits approved, I'm presuming that everybody has a pretty clear idea of what's going to happen over those five years. Has an agreement around that been formalized or any assumptions made about that?

Hon. D. Zirnhelt: The approved cutting permits have been grandparented as per the appendix, so they know pretty much where they're going to operate. But to the extent that it's been formalized, no. As of the effective date, it will have to be formalized by the transition committee as it is set up, so work is being done to be ready so that there is a continuous flow of decision-making. That's the whole point of the transition provisions in the treaty.

G. Abbott: I guess sections 18 and 20 really work in tandem for the purposes of this question. As we see, between years 1 and 5 a gradual reduction in the volume of cut that is going to be available to the holders of existing licences, we see a gradual growth in what I think is generally termed the residual proportion of that -- that is, the cut that is allocated to the Nisga'a under the terms of this agreement and as set out specifically in

section 20. Is it clear that the Nisga'a have complete control over the disposition of that cut from years 1 to 5? Can they, for example, do what they will with their 40,000 cubic metres in year five? Or is there some limitation around what they can do with it?

Hon. D. Zirnhelt: They can do what they want, subject to the provisions of

section 6 -- which is the

section about the standards, the laws, that they might make with respect to the management of timber resources -- and subject to other provisions, such as timber-marking requirements.

G. Abbott: I know that at some point in the agreement, as well, there is a limitation on the Nisga'a's ability to put a major mill in place -- I think for the first ten years or at least for the first nine years. But there is no limitation, as I understand it, on, for example, the Nisga'a creating a mill with a capacity of 40,000 or 50,000 cubic metres, whether we call it remanufacturing, value-added or whatever. They could put in any sort of processing facility that they wish, I gather, of a capacity that would deal with the volume, or the magnitude, of 10,000 to 40,000 cubic metres. Is that correct?

Hon. D. Zirnhelt: It's fairly clear that it would have to be value-added timber processing, not primary breakdown. That's the meaning of

section 71(b). I did say there were some subject-tos in what they can do. They have to provide, at reasonable rates, the amount cut by them . . . . That's

section 24. They have to make the timber harvested reasonably available to local mills.

[1545]

G. Abbott: I don't want to spend a lot of time quarrelling about the

interpretation of words, particularly as someone suggested that I might aspire to be a lawyer. I think lawyers quarrel far too much about the meaning of words. But in the phrase "reasonably available to local mills," the term "reasonably," in that context, does raise some questions about what the availability is going to be. How will we know or how will we identify what is reasonable in that context?

Hon. D. Zirnhelt: It's important that the record reflect that the licensees did not want fibre supply agreements specified in this treaty. They wanted the freedom to negotiate timber at market rates, so the treaty reflects the language -- "reasonably available."

G. Abbott: The minister anticipated my next question here, and that is the mechanism through which this volume, ranging from 10,000 to 40,000 cubic metres annually, would be made available to the local mills. This would simply be, then . . . . The mechanism would be a local bidding, I presume, between operators and the Nisga'a. Or is there some more elaborate mechanism that comes into play with reference to that?

Hon. D. Zirnhelt: It is by private arrangement. Rather than log supply agreements, it's by private agreement between the Nisga'a and the other people who might consume the wood in that area.

G. Abbott: Thank you for that explanation.

On to

section 19. The

section reads: "During the transition period, the aggregate volume of timber to be harvested by holders of licences from that portion of the" -- and I'm not going to attempt to pronounce the word -- "watershed that is within Nisga'a Lands will not exceed 210,000 m3."

I'd ask the minister to explain that. I presume that this watershed is only partially located on Nisga'a lands, therefore the reference to 210,00 cubic metres.

Hon. D. Zirnhelt: That is a global amount over the five-year period. This is an area where access had been restricted during the negotiations, and what it does is guarantee access to this particular valley. But the Nisga'a were concerned that the valley, which contains the bulk of the remaining mature timber, would be harvested too heavily during the transition period. So the specified volume limit does not prevent an additional volume to be authorized from the area by the Nisga'a.

[ Page 11670 ]

G. Abbott: I thank the minister for the useful explanation. In fact, one of my colleagues mentioned earlier that we could probably expedite this whole process if you just sent your green book over to us, and we knew either better questions to ask or better answers to hear. But I suspect that you'll want to save sending it over until the end of this, in case there are some really good questions that we hadn't thought of asking, that we didn't ask. Thank you for that, in any event.

Okay, on to

section 20. Again,

section 20 lays out the volumes in the residual category -- that is, the volumes that the Nisga'a will be authorized to harvest, years 1 to 5. Will the Nisga'a contractor provisions that are laid out elsewhere in this agreement apply here, or are the Nisga'a free to use whatever contractors they wish?

[1550]

Hon. D. Zirnhelt: Contractor provisions are for licensees only. So no, it doesn't apply to this section.

G. Abbott: So, again, the Nisga'a have complete freedom or flexibility to use whatever contractors they wish for the purposes of extracting their portion of the AAC.

One of the other questions that comes up occasionally is: for the Nisga'a, as they undertake their extraction operations, must they operate under the conditions of the B.C. Forest Practices Code? Or can they operate under a new Nisga'a forest practices code during years 1 to 5?

Hon. D. Zirnhelt: They operate, as per

section 6, under the laws that they make to govern timber harvesting.

G. Abbott: So on the effective date, they have the authority to make laws with respect to the management of timber resources. For example, in year 1 they could have their forest practices code in place and use it -- fair enough.

Under

section 21, it talks about overcut and undercut volume, determined under appendix H. The question I have with respect to

section 21 . . . . Perhaps it's not a question anymore, given that the minister pointed out previously that timber cutting permits and timber cutting arrangements have pretty much been clarified, approved and so on for at least the first year and, I gather, perhaps for subsequent years of the transition period as well.

Would the provisions of

section 21 come into play if harvesting approvals were delayed for some reason -- a disagreement on the forestry transition committee, or for whatever reason that might occur. Can that happen? If that were the case, would these provisions still apply?

Hon. D. Zirnhelt: I believe it was yesterday that I mentioned that we would go to dispute resolution if necessary, but that we had time lines. I said yesterday that there were time lines associated with decision-making. If they don't follow the time lines, we can go to dispute resolution.

G. Abbott: I appreciate that they can go to dispute resolution -- fair enough. Dispute resolutions can take a considerable length of time in many circumstances as well, and I'm not sure that it necessarily answers the question. If an undercut were the product . . . . Again, I can't imagine the circumstances, but theoretically it could certainly occur that parties are in disagreement and that over time a dispute resolution kicks in. But it takes considerable time for resolution as well. If that were the case, if that should occur, would the provisions still stand?

Hon. D. Zirnhelt: If there is a delay because of a decision by the transition committee, it does not constitute an undercut for the purposes of

section 21.

G. Abbott: Moving on to

section 22, which lays out the maximum volume that will be harvested in years 6 through 9 . . . . The allocation of that harvest is entirely, at that point, the jurisdiction of the Nisga'a, is it not?

Hon. D. Zirnhelt: Yes.

[1555]

G. Abbott: Just for certainty, as of year 6, any sort of lingering rights or opportunities for existing licensees in the area will have been extinguished. Is that correct?

Hon. D. Zirnhelt: As it stands, yes, that's the way it will be, unless they've built up relationships that then get codified in some way under Nisga'a governance.

G. Abbott: So again, as of year 6, the Nisga'a will effectively be in the same position as a private forest land owner. Although they have their cut specified, they are certainly free to enter into agreements with licensees in the area to cut timber or do what they will. Or they can choose to harvest with their own contractors or in whatever way they choose. Is that a fair . . . ?

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

G. Abbott: Again this is a point that the Premier and perhaps the minister made as well. But when we reach year 9 and the level of 130,000 cubic metres, we are finally . . . . Again, as we understand it from the previous discussion and, I presume, as the government has found from their extensive negotiation with the Nisga'a, it's in year 9, at a 130,000-cubic-metre annual allowable cut, that we reach the level at which the Nisga'a feel comfortable that it is a long-term and appropriate, from their perspective, level of harvesting for their lands. Is that correct?

Hon. D. Zirnhelt: We don't know; it may go up, and it may go down.

G. Abbott:

Section 23 states: "The Nisga'a Nation and British Columbia may negotiate agreements in respect of matters such as the rate of harvest of timber resources on Nisga'a Lands." For what period of time -- and I'm sure the answer is obvious here, but the minister can clarify it for me -- and for what purpose is this particular provision in the agreement?

Hon. D. Zirnhelt: The purpose of this clause is to permit a line of communication between the Nisga'a and British Columbia, just to permit arrangements and discussions. It's simply a permissive clause.

G. Abbott: So

section 23 doesn't have any particular reference to the transition period or the post-transition period. It is simply there to state that, at any point, the Nisga'a nation and British Columbia can sit down and negotiate agreements

[ Page 11671 ]

with respect to matters such as the rate of harvest. It's just not clear to me why exactly it would be in there. I presume that lines of communications between the Nisga'a nation and British Columbia are open at all points in time. Why would we need to state it here?

[1600]

Hon. D. Zirnhelt: The purpose of the clause was for after year 9; it could be anytime, but it is after year 9. But years 1 to 9 have already been negotiated, and that was the purpose of negotiating -- so we'd know what they were. So it's mostly after year 9.

G. Abbott: That may help in some respect here. The reason for my puzzlement to this point in our discussions has been that it's very clear to everyone that after year 9 the cut may go up or may go down and that the Nisga'a are in the driver's seat with respect to that. This

section 23, then, would seem to me to be an opportunity for the Nisga'a -- should they wish to -- to negotiate an agreement with British Columbia to secure an agreement about the rate of harvest. I'm not sure why they would contemplate that after year 9, when clearly they have negotiated in a powerful way to be masters of their own destiny after year 9. Again, I'm not clear why they would want that in there.

Hon. D. Zirnhelt: It's an open clause, just stating that it is possible to do that and permitting that it be done. The clause does say: " . . . of matters such as the rate of harvest . . . . " But it is a general clause, and it means that there can be relations between British Columbia and the Nisga'a on a number of matters with respect to timber resources.

G. Plant: One of those matters is the rate of harvest of timber resources, so one possibility contemplated by the clause is that after year 9 there might be an agreement between British Columbia and the Nisga'a nation with respect to the rate of harvest. There may be an agreement between the two that fixes the rate of harvest. That's not just a process agreement. That would be a substantive agreement on the rate of harvest. I know that the clause doesn't limit the subjects of agreements to that, but clearly that is one possible outcome. Is that a correct reading of the provision?

Hon. D. Zirnhelt: Yes.

G. Plant: Then my colleague's question, I think, resurfaces. What is the logic of having that in place, given the logic that I understood with respect to giving the Nisga'a, as owners of the land, as owners of the forest resource, the power to determine the rate of harvest? Does the province already foresee that it's going to have an agenda nine years from now to try and negotiate a particular AAC with the Nisga'a? What exactly is the province's intention with respect to this clause?

Hon. D. Zirnhelt: It may be that the Nisga'a want assistance in establishing an AAC. They may want to have an agreement with us on that.

G. Plant: This might be the vehicle for which there could be a little capacity exchange, in terms of getting access to provincial Ministry of Forests personnel to help establish a sustainable rate of harvest. Is that an example of the kind of thing the minister meant in his last answer?

Hon. D. Zirnhelt: Probably not. If you're getting at the cost of the treaty, we're not prepared to provide any more than what's contemplated in in-kind contributions already. It's purely a permissive clause, and it's simply there in case there's some relationship that needs to be developed between the Nisga'a and British Columbia. We're not sure what that would be.

G. Plant: Let me then explore the outer limits of the permission, if you will, created by the clause. The treaty is pretty careful, in paragraph 8 of

chapter 5, to talk about the constraints on Nisga'a law-making power in respect of forest standards. Through the treaty, the province has achieved certain promises, I suppose, on the part of the Nisga'a with respect to forest standards and forest practices. My reading of

section 23 is that you couldn't use

section 23 as a way of avoiding any of those obligations in respect of forest standards. I would be alarmed if you could use

section 23 for that purpose, and I assume the minister can assure me that that's not the intention or within the contemplation of

section 23.

[1605]

Hon. D. Zirnhelt: That's correct.

G. Abbott: Could or will

section 23, given that the minister has noted that it is most likely to come into play after year 9 . . . ? Is this provision one that has been put in place either at the request of the Nisga'a or at the request of British Columbia to ensure that, for example, if the Nisga'a secure an additional AAC of 150,000 cubic metres, some agreement would be tied in with respect to that? Is that one explanation as to why

section 23 is in the agreement?

Hon. D. Zirnhelt: The answer is no.

G. Abbott: I'm not sure we're a lot closer to understanding why this one is in here. This may prove to be one of those questions without an answer that haunts us through eternity . Is

section 23 in there to give comfort to the Nisga'a or to give comfort to British Columbia? Again, I'm intrigued by why it's there, given the content, tone and direction of the balance of the agreement.

Hon. D. Zirnhelt: It's my understanding that the parties agreed. It was mutually desired, and the whole idea was to keep the door open for a relationship.

G. Plant: I think, in this context . . . . I just want to revisit

section 35 for a moment to point out that there may be a difference between having . . . . By

section 35, I mean

section 35 of the 1982 Constitution Act. What paragraph 23 of

chapter 5 does is create a permissive opportunity for the two parties to enter into negotiations to negotiate certain agreements. Now, that opportunity would exist without this treaty. I can't begin to think of a reason why it wouldn't be there. It's there now; I'm sure it would be there tomorrow; it would be there nine years from now. If, at any point, with respect to any aspect of this treaty, the Nisga'a and British Columbia wanted to sit down, talk about it and even reach an agreement on some issue that's arisen, I hope that that's the kind of thing that would happen.

But when you have this possibility expressed in the treaty, you have created at least the potential for the kind of problem, frankly, that besets the province right now in the

[ Page 11672 ]

courts in respect of the Gitanyow overlap case. That is, the province thinks it's just voluntarily committed to a process that has no legal ramifications or consequences attached to it. But, in fact, we find that a judge, at least at the trial level, is prepared to say that the provincial Crown is subject to a fiduciary duty in respect of the agreements that it may or may not negotiate under a clause like this. Really, this is a recipe for potentially compounding, or creating, difficulties where none need exist.

I know that the province's position, as stated here on more than one occasion during the course of this debate, is that it always intends to negotiate honourably with the first nations. I respect that statement of intention. But it's one thing to have that as a political obligation and another to have it as a legal obligation. So in pursuing just what paragraph 23 is all about, at least for my part, I'm always a little bit concerned about the fact that there's something significant -- constitutionally significant, perhaps -- about having this kind of otherwise inexplicable provision put into a treaty.

[1610]

I suspect it's not an issue we're going to resolve by debate on this occasion, any more than we have resolved it up to this point. But I wanted to put the comment and the concern on record.

Hon. G. Wilson: Well, I disagree with the member's observation. I think that

section 51 of the general provisions in this agreement amply covers his concerns.

G. Abbott: We'll leave

section 23 unresolved, at least from the opposition's perspective. Perhaps . . . .

G. Plant: It only deals with the agreement. It doesn't deal with the negotiation process.

The Chair: Through the Chair, members.

G. Plant: I wish I had the first half of the agreement committed to memory, but I'm grateful for the opportunity to look at paragraph 51 of the "General Provisions" chapter. In fact, it doesn't answer my concern. Clearly it deals with any agreements that may be reached, but my concern is a concern around what might be attached to the obligation to negotiate in good faith -- that is, the negotiation process itself. That may be dealt with somewhere else. I think the minister's comment is helpful in terms of demarcating the limit of my concern.

But maybe there's another provision that, frankly, I haven't got at the top of my head. I'm getting a mentally telepathic signal that it's in paragraph 50. Yes, there's the whole discussion of obligation to negotiate, which I will reread again -- with pleasure, no doubt.

Hon. G. Wilson: I appreciate the member alerting me to the fact that he has telepathic capabilities. We'll certainly keep our thinking very narrow and focused.

G. Abbott: I'm surprised at the comment. We already thought you were headed in that direction.

Section 24 says: "The Nisga'a Nation will make timber harvested under paragraph 20 and subparagraph 21 (

a) reasonably available to local mills." That, of course, refers to the residual portion of that harvest, that portion of the harvest that will be under the authority of the Nisga'a. Should we be curious as to why the same statement is not made with respect to

section 17 timber? Does the same obligation to make it reasonably available to local mills hold for the

section 17 timber as well? Does it go without saying, for some reason?

Hon. D. Zirnhelt:

Section 18 indicates which portion of the cut goes to the licensees. They have that. That tells them how much they get.

[E. Walsh in the chair.]

G. Abbott: Moving on to

section 25, the

section reads: "Except as provided in Appendix H, British Columbia will ensure that on the effective date any portion of: (

a) any agreement under the Forest Act; and (

b) any plan, permit or authorization associated with any agreement under the Forest Act that applies to Nisga'a Lands, ceases to be valid." Do the silviculture, road deactivation and associated responsibilities under the code stay with the licensees after that date?

Hon. D. Zirnhelt: Yes.

[1615]

G. Abbott: Built into any compensation agreement or any associated agreement with this, then, will be provisions to ensure that as the licensees undertake their harvesting, they are fully cognizant of their responsibilities for silviculture, road deactivation and so on. That's straightforward, I guess.

G. Plant: I'm interested in exploring what I guess you could call the mechanism of change. Earlier my colleague asked the question of whether there would be any other consequential statutory amendments in respect of the Forest Act in order to give effect to the provisions of this chapter. The same general issue is the context of my question.

Under the Forest Act, there is a variety of different means by which tree farm licences and timber supply areas may be created and altered. In general terms, those are decisions made by particular officials acting under the authority of the Forest Act.

Dealing first, I guess, with tree farm licence No. 1 -- TFL 1 -- what is going to happen when the forest revisions take effect is that, in essence, TFL 1 as it is presently configured as an area on a map is going to get smaller by that portion of TFL 1 that is currently within Nisga'a lands or currently encompasses part of Nisga'a lands. I may be wrong in that statement, and if so, I invite the minister to correct me.

But just to complete the process, I assume that something similar will happen in respect of the designation of timber supply areas. And I may be wrong. The various timber supply areas that we talked about earlier in the course of this debate and that currently overlap or cover what will become Nisga'a lands will simply no longer apply over what is Nisga'a lands. There will be an area carved out of those various tenures and rights. Is that a correct statement, at least as far as it goes, of how this treaty will take hold in respect of its application to forest tenure rights?

Hon. G. Wilson: The second half of what the member said is correct. But the area doesn't change, so the first half is not correct. He's quite correct when he suggests that there will be a portion that will be removed, but the area itself stays the same.

[ Page 11673 ]

G. Plant: Maybe I should break it down to the TFL side, first of all, and then the TSA side. I apologize if my questions sound like they're coming from someone who doesn't have a complete understanding of how these tenures work. I envision TFL 1 as, among other things, a line on a map. It's a line that covers an area of the surface of the earth in northwestern British Columbia, some of which is land that will become Nisga'a lands.

So I envision that that portion will be removed from TFL 1 and that what TFL 1 will become is something smaller than it now is, that it will be as though a jigsaw puzzle piece were removed out of TFL 1. That's how I see it happening for the tree farm licence. Is that correct?

[1620]

Hon. G. Wilson: As we go through the fine nuances of law here . . . . In effect, you are correct in the way you have described it.

G. Plant: Repeating the same explanation with respect to timber supply areas would be hazardous, because it might suggest to someone that the timber supply area and the forest licence operating in the timber supply area are the same as the tree farm licence, which I think is not correct. But I believe that the general idea is somewhat similar in that a timber supply area is a line drawn on a map that describes an area of the surface of the earth and that some portion of three or four TSAs -- I can't remember -- as they are currently configured, will be removed, because they are Nisga'a lands and they will no longer be part of those timber supply areas. Is that correct?

Hon. G. Wilson: Yes, in effect, that's correct.

G. Plant: Now, the way that that is ordinarily done, if it were ever to be done, would be under the various provisions of the Forest Act that give officials power to do things like delete areas or alter the boundaries of a timber supply area and so on. One of the things that is not always clear in this agreement is, in fact, the mechanics of how the province will, within its authority, implement the obligations that it has undertaken in this agreement. Here I think the agreement may be clearer than it is in other cases.

I gather that paragraph 25 is really an assurance or a promise by the province that various statutory officials, who have the power to make the decisions to effect the changes in boundaries and so on, will do that. It will be done on the effective date.

Or is there some other process contemplated? Another process might be, for example, the argument that

section 25 of this agreement will just take effect according to its terms. I mean,

section 25 will become the law of the province of British Columbia, as the Minister of Forests pointed out in another context earlier -- that that's what's going to happen here. And

section 25 is pretty clear: any part of any agreement under the Forest Act that applies to Nisga'a lands will simply cease to be valid. And I'm trying to figure out what the mechanism is by which that will be achieved.

Hon. G. Wilson:

Section 3 of the act says that it has the force of law.

G. Plant: So from the government's perspective, is that it? Or does the government expect that within the Ministry of Forests, various officials acting under the Forest Act are going to have to exercise statutory decision-making power in order to give effect to these provisions? Or is it some other process?

Hon. G. Wilson: No, there would be nothing else. It's covered in

section 3.

[1625]

G. Plant: All right. Then, in terms of drawing new lines on maps, for example -- like a new line to describe the boundaries of TFL No. 1 -- it is, I suppose, almost a clerical function. People in the Ministry of Forests are just going to get the maps out and, acting under the authority of

section 25 of

chapter 5, as given light by

section 3 of the statute itself . . . . They're going to use that as the lawful authority under which the exercise in map-drawing will take place, and -- something more important -- that will become the basis upon which the chief forester will then realize that he has to do reallocations and reassess the sustainability of harvest in the remaining areas.

Hon. G. Wilson: Well, that will be true with respect to the TSA, but with respect to the TFL, it will be exactly as it is described. I'm not sure if there's some confusion on that question for the member opposite. But that is true for the TSA.

G. Plant: I'm not sure that there is confusion either. Let me say this: in my first reading of the treaty, and I guess leading up to it, trying to come to terms with the AIP and what it would mean . . . . One of the questions that I ask myself -- and I don't think it's a matter of purely academic interest -- is: what is going to be the process of implementation? What is that going to involve legislatively and administratively?

At one point it seemed to me that it would be difficult to give effect to the treaty without -- I won't say literally volumes of consequential amendments -- a very large statute containing a whole host of consequential amendments. In fact, the consequential amendments are relatively few in number. I assume that that is so because of what might be called the all-encompassing nature of

section 3 of the act itself. The province has deliberately chosen to put, in this act, this

section that will, in some ways, require people to look at a host of statutes as the years go on and to always be mindful that in another act -- which isn't the Forest Act, the Environmental Assessment Act or the Wildlife Act -- there is a provision which in some ways overrides some of these other statutes in order to give effect to the promises in the treaty.

It may be merely a matter of form. At some point it may become a matter of substance. Because this is a point in the treaty where the issue arises -- that is, the mechanism -- I want to explore the issue with the minister and get from him a sense of the province's approach, which I think, at the risk of summarizing it too briefly, is that the power flows from

section 3 of the act itself.

Hon. G. Wilson: Yes, that's true.

G. Abbott: The Minister of Forests noted that the silviculture, road deactivation and associated responsibilities stay with the licensees after the effective date, even though the licence may cease to be valid -- fair enough. My question is around when the obligation of the holder of the new, non-replaceable licence to engage the percentage of Nisga'a contractors set out in

section 57 of appendix H comes into play.

[1630]

Let's use the quick, hypothetical example of SCI harvesting timber this year, prior to the effective date. Their obliga-

[ Page 11674 ]

tion to do the road deactivation work, etc., after the effective date, remains in place. We've talked about silviculture, and I don't think there is an obligation to use Nisga'a contractors for silviculture purposes. Will the obligations around Nisga'a contractors come into play with respect to those responsibilities associated with the code?

Hon. D. Zirnhelt: Yes, the requirement to use Nisga'a contractors is outlined in

section 57, and it is strictly related to the harvested volume. It's the harvesting function.

G. Abbott: Again, just so I'm clear, the obligations under

section 57 refer only to what might be termed the stump-to-dump, full-phase contractors who are extracting the timber and getting it to the destination. But for any of those activities that follow harvest -- silviculture, road deactivation and other responsibilities -- the obligations, or requirements, for the use of Nisga'a contractors do not come into play. Is that a correct

summary?

Hon. D. Zirnhelt: Correct.

G. Abbott: Moving on to

section 26, it reads: "Timber harvesting rights under a licence or permit granted under the Indian Timber Regulations in respect of former Nisga'a Indian reserves expire on the effective date." I don't know anything about Indian timber regulations, but I'm assuming that that is some sort of federal statute under the Indian Act. My question is: why do we have these expiring on the effective date, given that former reserve lands are not included in the cut control provisions of this agreement?

Hon. D. Zirnhelt: Because the Nisga'a will control the harvesting on Indian reserves, and not the federal government.

G. Plant: How does this provision relate to category B lands in

chapter 3 -- that is, the piece of the lands that are called category B lands? Clearly it doesn't. So what is the regime, if any, that applies with respect to category B lands in respect of timber harvesting after the effective date? My assumption is that such rights as may now exist will continue to exist and that any harvesting on those lands will be subject to provincial laws of general application. If that's not correct, could the minister correct me?

Hon. D. Zirnhelt: That is correct.

G. Abbott: We're moving on to "Timber Harvesting Rights During the Transition Period."

Section 27 reads: "British Columbia may enter into a licence with a person" -- etc. My question -- and, again, I'm sure that there is a very easy and straightforward answer to this -- is: why does this

section not read: "British Columbia and the Nisga'a nation may enter into a licence . . . "?

Hon. D. Zirnhelt: British Columbia wanted something that could be effective as of the effective date. And we have the laws in place; we know that we have the laws in place. Therefore we asked that it read this way.

[1635]

G. Abbott: Further, under

section 28 we come to subsection (c). Again, just a quick read of

section 28: "A licence referred to in paragraph 27 that replaces a major licence will" -- going on to subsection (

c) of

section 28 -- "require the holder of the licence to use Nisga'a Contractors under full phase logging contracts in accordance with Appendix H."

If there are contractors who are not full-phase logging contractors . . . . I gather that full-phase logging contractors are kind of the rule on the coast, as opposed to the exception. It seems to be a little different in the interior. Would this have application to more narrow logging contractors?

Hon. D. Zirnhelt: I'm told that the licensees are all full-phase up there, and this applies only to full-phase contractors.

G. Abbott: I won't belabour the issue. If all the contractors are full-phase contractors and that adequately covers it off, that's fair enough.

Does the province anticipate -- or do the province and/or the Nisga'a nation anticipate -- that the requirement under

section 28(

c) will have an effect on harvesting costs in this area?

Hon. D. Zirnhelt: Most of the harvesting is being done by Nisga'a contractors at competitive rates now, so the answer is no.

G. Abbott: The reason I ask the question is a straightforward one, I think. Typically, when requirements or obligations are introduced into the marketplace, they have the effect of driving up costs -- for example, if we were to say that 100 percent of harvesting has to be done by a particular group. That's not the case in this agreement; the largest percentage we see is 70 percent, under

section 57. Nevertheless, the obligation to use 70 percent Nisga'a contractors as of years 2 to 5 would be certainly a new element in the marketplace.

Now, is there a way to assure the licensees -- given that we have talked around a bunch of compensation issues here over the last couple of days -- that the government or, for that matter, the Nisga'a nation can provide comfort or assurance, despite the percentages set out in

section 57, that the logging rates will continue to reflect the market rates for those services in that area? Or is it a matter that the percentages or the obligation to have 70 percent Nisga'a contractors could have the effect of skewing the marketplace for those purposes and hence giving rise to concerns for compensation provisions?

Hon. G. Wilson: I was trying very hard to follow the logic of the member. I see no reason to suggest, because of the percentages set out in this agreement, that this should unduly affect the marketability or viability of the operation -- because they are Nisga'a contractors. I don't think that should necessarily drive prices up or costs up. I'm not sure what the logic is. The market is the market. If it becomes unprofitable, it doesn't happen.

[1640]

G. Abbott: Again, I'm not going to belabour the point, but I'm not going to have it dismissed quite that readily either. In my former life as a farmer in Sicamous, if someone said to me, "You have to buy your fertilizer from a particular vendor," and in fact if all the farmers in Sicamous were advised that they had to buy their fertilizer from a particular vendor, one might expect that very quickly that would have an effect on the market price of fertilizer for farmers in Sica-

[ Page 11675 ]

mous. That is a crude example of the point which I'm making: when requirements or obligations are injected into the marketplace, it can have the effect of driving up prices or costs.

Again, while in years 2 to 5 there remains the opportunity for 30 percent of the full-phase contractors to be non-Nisga'a contractors, nevertheless, I don't think it's too much of a stretch to assume that in fact this obligation may produce the effect of having additional costs for harvesting. If that's the case . . . . Again, I'm waiting for some assurance that it's not, rather than a fairly quick dismissal of the point. If it's not -- if in fact the obligation will have an effect on harvesting costs -- that is going to be something which is of concern from the compensation perspective. Again, I'll ask for further assurance with respect to this.

Hon. G. Wilson: I think the assurance can be found in the reality and not in the hypothetical. The reality is that there are currently three contractors operating. The general provisions, within the appendices, that affect this --

section 57 -- suggest that it isn't 100 percent. It sets out the percentages that are going to be there.

Section 59 in the appendix also provides safeguards with respect to the availability of Nisga'a contractors. So I don't think the member has much to worry about there, given the fact that if you look at what is taking place today, those kinds of concerns aren't supported.

G. Abbott: I won't belabour this point any further. I do hope that experience proves my concerns to be wrong. That would certainly be what I would hope of that.

I don't have any questions with respect to . . . .

G. Plant: I do.

G. Abbott: Oh, you do. Go ahead.

G. Plant: I have a question about paragraphs 27 through 29, generally. I just want to be sure that I understand what's happening here. On the effective date, all the existing agreements, plans, permits and authorizations cease. After the effective date, but within the transition period, British Columbia may enter into licences with people who did hold them before.

So there's the possibility that all of the people, entities and organizations that have harvesting rights within Nisga'a lands, as of the effective date, will get them back again for the purposes of enduring the transition period, subject to the particular provisions that relate to the transition period. But there has to be this cut, in the Gordian knot or whatever it is, as of the effective date. While it's the case that the people who hold those licences and authorizations may continue to get some harvesting rights after the effective date, during the transition period, there's no guarantee that that is so.

Is that a fairly correct statement? I mean, if it's not, I'd be grateful for an explanation of how it's wrong.

[1645]

Hon. G. Wilson: Certainly the intent is that they will. But, as the member knows, there are no guarantees in life.

G. Plant: One could ask the question: why do it this way as opposed to allowing the existing licence holders to continue their operations after the effective date but to do so under the new rules established for the transition period? That is, why, from the province's perspective or the Nisga'a perspective, was it necessary to bring all of the existing licences to an end only to create the possible renegotiation and reissuance of those licences?

Hon. G. Wilson: The member has a point; it could have been worded that way. From what I understand from those who were at the table, the reason is that, first of all, it's no longer Crown land. Secondly, I think the Nisga'a wanted the clean break. So that's the reason it was worded the way it is.

G. Plant: I suppose, in terms of the differences between the before and the after, at least as a matter of legal obligation, the requirement that holders of the transitional licences use Nisga'a contractors is an example of a different legal regime that would apply after the effective date -- as opposed to now, because that requirement does not exist now. It may be the case that in fact the majority of contractors are Nisga'a contractors, but there's no obligation that they be so.

So one of the things that's achieved here, by these paragraphs, is that the Nisga'a, if you will, have conceded some continuation of relationships and a right on the part of the province to determine who should get to harvest what is the province's share of the timber during the transition period. But in return, among other things, the Nisga'a have a promise from the province that only Nisga'a contractors will actually do the harvesting. Is that correct as a statement of how the process works?

Hon. G. Wilson: In general terms, the member's description is correct, except that it is not only Nisga'a contractors. It's the percentage that's prescribed, as set out in the appendix.

G. Abbott: Moving on to operational plans and permits during the transition period, the one question I have from this

section relates to plans and permits for the Nisga'as . . . . Well, it begins in year 1 with a 10,000-cubic-metre cut, moving up to a 40,000-cubic-metre cut in year 5. Is there in this agreement or elsewhere any express obligation for the Nisga'a or persons operating under licence to the Nisga'a to fulfil their silviculture responsibilities?

Hon. D. Zirnhelt: The law that applies is the law that requires standards to meet or beat our Forest Practices Code. They have to meet those standards in their requirements.

G. Abbott: So the obligation is a real one, if an indirect one, in that they must meet or exceed the requirements under the code -- the code requiring reforestation. Hence, indirectly at least, there is a real obligation on the Nisga'a to reforest their lands harvested.

Hon. D. Zirnhelt: When we discussed

section 8, we didn't get into a line-by-line discussion. But

section 8(

d) refers to reforestation -- that part of the code that relates to reforestation. There are standards for that. There are also standards for a silviculture system; that's

section 8(h). So those two, taken together, will require that they provide a law for discharging silviculture obligations.

[1650]

G. Abbott: It is clear, then, from the ministry's perspective, that a Nisga'a forest practices code that contemplated -- in some circumstances, at least -- the natural regeneration of a harvested area would be clearly unacceptable. Is that correct?

Hon. D. Zirnhelt: That's correct. We have natural regeneration systems that are acceptable under the code.

[ Page 11676 ]

G. Abbott: I think I understand the minister to say that we do, under the code, have some systems or opportunities for natural regeneration. The Nisga'a would, of course, have those same opportunities. But they would not have a broader opportunity for embracing natural regeneration than that which exists currently in our code.

Hon. D. Zirnhelt: Yes -- no more broad than the code.

G. Abbott: My next question is about permits existing before the effective date and whether they would have force and effect after the effective date. Again, to return to the briefing note which I've quoted from previously . . . . Let me see if this one is dated and so on. I think we are talking here of February 5, 1998, a briefing note prepared for the deputy minister.

Based on that, is the outcome here that permits existing before the effective date have force and effect after that effective date?

Hon. D. Zirnhelt: As per

section 11 of appendix H, the cutting permits are grandparented, and any additional cutting permits that are approved since that initialling of the agreement and before the effective date that aren't objected to by the Nisga'a -- so any more that are added to through the approval process under the interim protection measures agreement.

Hon. D. Zirnhelt: To be clear, it's the ones approved and grandparented under

section 11, plus any that are approved under the interim protection measures agreement.

G. Abbott: I think that takes care of it. Again, as the briefing note points out, the ministry did have some concern in terms of the joint approval process after the effective date possibly adding some delay to company operations and adding significant costs as a consequence. Has that concern been allayed or done away with as a consequence of the provisions in the agreement? Are we dealing with a briefing note which had concerns which have been overcome by some provisions in the agreement, or does that concern still remain?

[1655]

Hon. D. Zirnhelt: The concern doesn't remain, so that

part is no; but everything leading up to your very last question is yes.

G. Abbott: At this time of day the minister is asking a lot of me to remember what I said before that point, but that's fair enough.

We can move on, I think -- unless my colleagues have any questions on 31-- to

section 32: "On the effective date, the Nisga'a Nation and British Columbia will establish the Forestry Transition Committee and will each appoint one member to that committee." I think it's clear enough what's intended here: a committee of two. I'm just hazarding a guess that the chief forester of the Nisga'a nation might be, for example, the Nisga'a appointee to that committee. I'm also hazarding a wild guess that either a district manager or a regional manager might be the sort of person appointed by the province. Is that correct? Is that the kind of committee that is envisioned here?

Hon. D. Zirnhelt: Yes.

G. Abbott: There is nothing in here to suggest that the committee could be expanded at any point to bring in a third party. I presume that it would be difficult to do so, in order to create a committee where ties could be broken and so on. I gather that the objective here is to reach conclusions that reflect a consensus of both parties and that for that reason, the committee of two is all that is contemplated by the agreement.

Hon. D. Zirnhelt: Yes, two. Only two are anticipated and felt to be needed.

G. Abbott: I'm not sure whether at some other point in this

section we get to the issue of what happens should a stalemate be reached at the committee level. I know there is a process -- and I think it's in the

schedule of appendices -- around the resolution of disputes. But perhaps this is the appropriate point to deal with that question, unless the minister can advise whether it comes up at some other point in the discussion.

Hon. D. Zirnhelt: Yes. Well,

section 38 deals with dispute resolution and refers to appendix H, sections 64 and 65.

G. Abbott: I appreciate that, and I see now in my notes where that exists. We'll leave aside any issue around arbitration, etc., till that section.

Section 33 states: "The Forestry Transition Committee has, in respect of Nisga'a Lands, sole authority to approve, extend or issue, or to exempt the requirement for: a. forest development plans . . . b. silviculture prescriptions and amendments submitted by the holder of a licence . . . c. all cutting permits and road permits required by the holder of a licence . . . and d. all road use permits required during the transition period."

The question here, I guess . . . . It relates to

section 53, on page 62, as well.

Section 53 reads:

"During the transition period, the Nisga'a Nation may commence, or intervene in, an appeal to the Forest Appeals Commission in respect of:

a. determination of whether a person has contravened forest practices legislation on or affecting Nisga'a Lands; or

b. the determination of whether to impose a penalty referred to in paragraphs 51 and 52 and the amount of that penalty."

[1700]

I'm curious as to how those two issues may be resolving themselves. It sort of seems that at one point, B.C. is delegating its authority over timber harvesting in this area to the

[ Page 11677 ]

forestry transition committee. On the other . . . . In

section 53 it appears that notwithstanding that, the Nisga'a may commence or intervene in an appeal to the Forest Appeals Commission on some of the issues which are set out in

section 33. I hope I'm making myself clear here.

Hon. D. Zirnhelt: The transition committee deals with decision-making powers.

Section 53 deals with simply giving the Nisga'a a right to appeal a decision based on the practices that would flow from the approval process. So the permits are approved under this

section that we're discussing, but under

section 53, the Nisga'a have a right to appeal a practice that is carried out under the permitted activity.

G. Abbott: I appreciate the clarification. The issue, though . . . . Again, it seems to me -- and I'm sure the minister will resolve my puzzlement here shortly . . . . The Nisga'a will form 50 percent of the forestry transition committee. As part of that, they will have an opportunity to take issues to arbitration, as per

section 38. The Nisga'a, furthermore, will have the opportunity to put in place their own forest practices code, which meets or exceeds the provisions of the B.C. code. Given all that, I am not understanding how they would end up intervening or appealing to the Forest Appeals Commission around contravention of forest practices legislation or other issues that the appeals commission might deal with.

Hon. D. Zirnhelt: We're not exactly sure what the concern is here, but there are two separate functions. One is the decision-making function. As you correctly point out, there are two parties to it: British Columbia and the Nisga'a. Once something is approved, if there's an activity outside the laws that govern that activity, then it can be appealed by the Nisga'a. They have the right to take it to the Forest Appeals Commission.

G. Abbott: When we're talking of

section 53 and the authority of the Forest Appeals Commission, I'm assuming that this authority will lapse with the end of the transition period. Is that correct?

Hon. D. Zirnhelt: Yes.

G. Abbott: So that helps, at least in that respect -- that it's only during the transition period, as

section 53 notes, that they would do this. The minister's explanation that the Nisga'a would in all likelihood be challenging an activity which took place beyond the terms of the cutting approval is useful as well; that would explain that point.

[1705]

Unless any colleagues have questions on sections 34 through 37 -- I don't, and I gather that others don't -- we can go on to

section 38: "The Forestry Transition Committee will make its decisions by consensus, and any dispute between the members of the Forestry Transition Committee arising out of the performance of its duties will be finally determined by arbitration in accordance with Appendix H."

In appendix H, I'm assuming that the sections we go to are sections 64 and

Section 64 reads: "The Forestry Transition Committee will adopt rules for arbitration of disputes referred to in paragraph 38 of the Forest Resources Chapter."

Section 65 reads: "The rules referred to in

section 64 will provide that, unless members of the Forestry Transition Committee otherwise agree, any arbitration will be resolved within 45 days."

I guess I'm a bit puzzled here, because I see arrows going around in a circle here somehow. I'm sure that's an unfair way to characterize it. But could I get an explanation from the minister with respect to this?

Section 38 refers to appendix H; yet appendix H seems to refer back to rules for arbitration of disputes referred to in paragraph 38. So I'm seeing arrows going around, without the flesh in between somehow. But perhaps that point can be clarified.

Hon. D. Zirnhelt:

Section 38 says that decisions will be made by consensus and that any disputes will be referred to rules. Any disputes under decision under

section 38 will be covered by the dispute resolution . . . . The committee needs to adopt rules for dealing with the disputes. They have to develop rules for the disputes, and

section 65 gives a time line. Rather than not having a time line, we opt to have one in here.

G. Abbott: In fact, there is going to have to be a further agreement, either by the forestry transition committee itself, the two individuals that are appointed to that by the respective parties . . . . There will have to be an agreement reached between them with respect to the rules of the arbitration process. Or, more likely, I'm assuming that there will be, at some point after the effective date or before the effective date, some additional agreement between the province and the Nisga'a nation with respect to what the rules of the arbitration process are going to be. Is that correct?

Hon. D. Zirnhelt: Yes, there will have to be rules for arbitration by the effective date.

G. Abbott: Will those rules be developed by the province and the Nisga'a nation? Or is it expected that the transition committee itself will be arriving at those rules?

Hon. D. Zirnhelt: Because the forestry transition committee doesn't exist, and won't exist . . . . The same parties will be developing the rules, so that on the effective date, the transition committee can adopt some rules that have been developed by those two parties.

G. Abbott: This is going a long way towards resolving my questions. At this point, the only rule of the game, so to speak, that has been developed in relation to this agreement is that any arbitration will be resolved within 45 days. Is that correct?

Hon. D. Zirnhelt: That's correct.

[1710]

G. Abbott: In terms of developing the rules around the arbitration process, is there a statute or a body of contract law or other . . . that would guide the parties? How will the parties set about achieving those? I would think that that's a fairly substantial agreement that would have to be reached between them.

Hon. D. Zirnhelt: There's a body of rules around arbitration, and the parties will refer to the literature around arbitration and the laws as a source of information. They'll use that as the basis for concluding their own rules.

G. Abbott: In terms of the day-to-day and ongoing, practical operation of the forestry transition committee, is it

[ Page 11678 ]

expected that -- on the province's side, at least -- their appointee to the forestry transition committee would be a district manager, a regional manager or an administrator -- that sort of position?

Hon. D. Zirnhelt: In all probability, it'll be the district manager or his designate, which would likely be the operations manager.

G. Abbott:

Section 33 certainly lays out the role and the responsibilities of the forestry transition committee. As we've discussed, should the transition committee be deadlocked on some area of responsibility as laid out in this portion of the chapter, the parties will at that point refer it to this arbitration process, which is as yet to be determined. And that arbitration process will be concluded within 45 days to ensure that there are not any delays -- at least, beyond 45 days -- to the harvesting of a licensee. Is that a fair

summary of what we have discussed here?

Hon. G. Wilson: Yes.

G. Abbott: We'll move on, then, to performance obligations.

Section 40 reads: "Notwithstanding paragraph 25, British Columbia will ensure that all obligations in respect of harvested areas and roads constructed on Nisga'a Lands imposed under agreements under the Forest Act or the forest practices legislation are fulfilled." I'm assuming that British Columbia's insurance that all the obligations will be met extends in perpetuity. We talked under

section 25 about the silviculture, road deactivation and associated responsibilities staying with the licensees after the harvesting was completed. Why would this

section be notwithstanding

section 25?

Hon. D. Zirnhelt: What this says is that even though we are cancelling a number of requirements, the silviculture or the attendant obligations carry on. They're grandparented; this grandparents obligations.

[1715]

G. Abbott: I thank the minister for that explanation.

Under "Performance Obligations,"

section 43: "The Nisga'a Nation will: a. determine which roads that require deactivation under forest practices legislation will not require deactivation." I'll leave the balance for now. I want to deal with that particular point.

If the Nisga'a nation are going to be determining which roads require deactivation under forest practices legislation, and should the Nisga'a nation make an inappropriate or ill-advised determination with respect to a requireme