Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, APRIL 30, 1997

Afternoon

Volume 4, Number 11

[ Page 2957 ]

The House met at 2:07 p.m.

Prayers.

S. Hawkins: In the House today is a constituent of mine, Dr. Duane Zilm from Kelowna. He is recognized in North America as an expert on computerization in health care, and I ask the House to please make him welcome.

I. Waddell: This morning the members from Trail, Quilchena, Chilliwack and I met as part of the delegation of this assembly to the Pacific NorthWest Economic Region, which is an organization of two provinces and five states. We met with the executive director of PNWER. He's a Canadian, a former consul general to Seattle and a former Canadian ambassador. I'd like the House to welcome the executive director of PNWER, Roger Bull.

B. McKinnon: I would like the House to help me make welcome friends of mine from Coquitlam: Alice and Bill Selby.

G. Brewin: I have two groups that I'd like to introduce to the House today. First, Glenlyon-Norfolk, a school in my riding, is hosting some folks from Albertville, France, which, as everyone will remember, was the location of the '92 Winter Olympics. They are 21 grade 11 students. But here with us today are their host, Ms. Girard, and Ms. Rosset and M. Bouquallaba from Albertville, France.

C. Clark: Today we are joined again by another young British Columbian who is interested in ensuring that we protect education in this province. So he has joined the Young Liberals of British Columbia executive. His name is Tom Madden, and he is a student at the University of Victoria. I hope the House will make him welcome.

J. Doyle: I'm very pleased to have two constituents down from the Golden area. They actually live by Doyle Creek, just west of Golden. I'm speaking of Ann Sutton and Paul Leeson. They also run one of the very finest lodges in all of Canada and British Columbia. That's the Purcell Lodge in the mountains near Golden. Make them welcome.

G. Janssen: With us today is Mr. Wolfgang Vogt, a senior member of the German Bundestag, a former associated Minister of Labour and Social Affairs, chair of the government caucus on labour issues and a member of the all-party Committee on Labour and Social Affairs. Joining him is Wolfgang Zimmermann, executive director of the National Institute of Disability Management and a member of the Order of British Columbia. I ask the House to make them welcome.

Hon. C. Evans: I'm very pleased that we've been joined today by some folks, at my invitation, to witness what's going to happen next here. I'd like to introduce Dan Edwards of the West Coast Sustainability Association, Errol Sam of the village of Ahousat, Rose Davison from the Coastal Community Network, Ardyth Cooper from the Sooke nation, Lynn Hunter of the Pacific Salmon Alliance, and Don Mallard of the UFAWU. Would the House please make them welcome.

G. Brewin: The second group I want to introduce is a group of young people: 66 grade 6 students from the United States. In fact, they are from Canyon Creek School in Bothell, Washington, and are led by their teacher Ms. Zettner. Would the House please make them welcome.

Introduction of Bills

FISHERIES RENEWAL ACT

Hon. C. Evans presented a message from His Honour the Administrator: a bill intituled Fisheries Renewal Act.

Hon. C. Evans: I move that the bill be introduced and read a first time now.

Hon. Speaker, this bill, the Fisheries Renewal Act, establishes an agency to undertake strategic initiatives for sustainable commercial and recreational fisheries in British Columbia.

This bill establishes an agency that will promote the conservation, protection and enhancement of the fisheries resource. It will make key investments in fisheries diversification and development. In addition, it will deliver skills training and opportunities to fishers, and aboriginal and non-aboriginal fishing communities will have assistance in planning long-term economic development strategies. Directors will represent all interests in the fishery and the diversity of the population, including regional fishery interests, first nations and various stakeholders, as well as federal and provincial government representatives.

The bill also complements the Canada-B.C. Agreement on the Management of Pacific Salmon Fishery Issues. The Fisheries Renewal Act demonstrates the province's commitment to fisheries renewal by going beyond commitments already made in the salmon agreement with the federal government.

Mr. Speaker, I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 19 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

CHILDREN AND FAMILIES MINISTRY

ACTION ON FOSTER CARE PROBLEMS

G. Campbell: Hon. Speaker, all members of the House are concerned about children that are in the government's care. This week, again we have faced a tragic situation with regard to a newborn baby in the government's care. We know that from day one, the baby's aunt had requested custody of the child so that she could join her sister. Two days after the baby's birth, the government evidently apprehended the child. About two months after the birth, on April 23, a court order was issued that gave custody to the aunt.

My question to the Minister for Children and Families is simply this: why wasn't home study commenced as soon as the aunt requested custody of the child, so that the child could go to the family directly from hospital as soon as she was ready to be released from the hospital?

[2:15]

[ Page 2958 ]

Hon. P. Priddy: I am pleased, as always, to hear the Leader of the Opposition, or anyone in this House, confirm what we all know: that we are all concerned about children.

Let me put this home study into context for the Legislature, if I might, hon. Speaker, by giving you the history of the ministry's involvement as I know it at this time. The ministry was granted an interim custody order on March 13, 1997. At that time, I am told, we were aware that several members of the family were interested in caring for the child. We requested that a restricted home study -- which means a family member -- for one of the family members begin on March 26, in the event that there would be or might be a Family Relations Act application or that the child would be placed in our care on a temporary basis.

At the request of the family member, there was a short delay in beginning the home study, and before the process was completed, there was a Supreme Court decision which awarded custody to that family member.

It is important to understand that there's a difference between hearings around custody and hearings around the need for child protection. So on April 23, 1997, the ministry and the family returned to family court. At that time, as I understand it, there was an understanding that the child would continue to remain in the temporary custody of the ministry while the home study was completed. Our intention was to have the home study completed by the time there was a family court conference to settle both custody and protection decisions, which was scheduled for June 12.

I think it's also important to understand, hon. Speaker, that the circumstances around child protection cases and custody orders are as complex and unique as the individuals involved. I also understand that there's . . . .

The Speaker: Minister, I'm going to have to ask you to wrap it up. I think it was well . . . .

Hon. P. Priddy: Okay, I will wrap it up by saying that I know there's a lot of emotion around these issues -- as there should be. Within the bounds of confidentiality laws and the ability to pull information together as quickly as possible, I've tried to provide a comprehensive and accurate accounting.

G. Campbell: I appreciate the answer from the minister. I think it is important to note that I do think that she's trying to do this. There are a number of, I think, vexing questions that raise themselves every time something like this takes place.

Again, I would like to go back to this particular issue. The family has released to the opposition -- released to us -- a document that was prepared by the ministry. The document makes it very clear that the mother of this child has four children. All four of the mother's children are currently in the care of relatives. We understand that.

My question to the minister, though, remains: in view of the many problems that the ministry is facing and in view of the problems that the minister herself has identified with regard to foster care funding, with regard to foster care support, with regard to people who are willing to come forward and provide foster care to our children, why wouldn't the ministry immediately start, with regard to the family, to make sure that the home studies were done so that the child could be released to the aunt who was caring for the child's sister and was willing to care for the child -- so that the child could be released directly from hospital into the aunt's care?

Hon. P. Priddy: I want to repeat something that I said earlier -- not to sort of be repetitive. But our understanding when we began the home study was that there was not one but several family members who might be interested in having the child placed with them. So the information I have is not that there was one, but that there might be several family members who had made that indication. There had, at that stage, been no application under the Family Relations Act to have this child placed in their care.

M. Coell: Mr. Speaker, there was another child placed in the same foster home last July. The mother of this child says that she lodged a series of complaints with the ministry regarding the care of her son. Today the minister has said that there was a police investigation into this complaint. However, it appears that the police investigation consisted of a phone call to the social worker on this case.

To the minister: what did her ministry do to investigate these complaints?

Hon. P. Priddy: The information that I gave out this morning, I think, is perhaps a bit more extensive than that, so I want to add to that just a little bit. Yes, there is a family that has raised repeated allegations. There were actually two investigations: one by the RCMP and one by the local Victoria police.

My understanding from the information I have is that the RCMP visited the hospital, interviewed pediatricians, interviewed physicians, interviewed nurses, talked to care providers, etc., before they made the decision that there was not substantiation either for criminal allegations or for a charge of abuse and neglect. So the information I have does not say that the police made one call to a social worker, but that they carried out an extensive investigation.

M. Coell: As the minister said, there wasn't just one complaint. There was a series of complaints. The mother of the boy apparently complained several times to social workers. Then her lawyer sent the ministry a series of letters. Can the minister tell us what happened in response to each of these complaints, by her ministry?

Hon. P. Priddy: I cannot provide that particular information to the House today. I'm certainly prepared to go back and look at that. But I do know that I have read in the press and heard others say that there was no response to that -- that there was no response either to the mother or to the lawyer. When I asked our staff to review the files just fairly quickly, we found at least a dozen responses from our ministry to the lawyer of the mother. We do know that the mother continues to have supervised -- because it's court-ordered by the judge -- access to her child.

G. Plant: When the tragedy surrounding Chabasco Flanders occurred some weeks ago, a memo from the Vancouver East social services manager advised: "We're in a very critical situation presently with our resource network."

It's clear that the foster care system is under pressure and that its resources are stretched. British Columbians know that there are no quick fixes here. But the question is: are we making progress? My question for the Minister for Children and Families is this: what can she tell us about the specific, concrete actions that she's taken in the last few months to deal with problems in foster care?

Hon. P. Priddy: I think the question is an important one. Let me list three or four of those. And let me also say that I asked the same questions. I also wanted to know: what is the state of foster parenting, and are we gaining or losing foster parents?

[ Page 2959 ]

That's a very hard job. I don't know how many people in this House have done it; I have not. But it is very hard to do.

In the last two years there has been a 30 percent increase in the number of people fostering in British Columbia -- the number of foster parents. That has come about by actually reaching out and recruiting foster parents. There is a new guidebook that we have done with the British Columbia Federation of Foster Parent Associations. It's an orientation handbook. As well, there are new guidelines for standards in foster homes. Those are all new initiatives. They will continue and we will find more.

G. Plant: I think all members are engaged with the minister in the effort of attempting to solve this problem. The question is always to move beyond general assurances to specific initiatives, and it's good to hear that there are some.

The question is: what more can be done? What more can we in this House do, what more can the minister do, and what more can British Columbians do to address this critical problem with foster care?

Hon. P. Priddy: Well, not wishing to assume I have a quick answer for that . . . . I'm actually very grateful for the sort of collectiveness of "what can we all do?" because I think we should look at that.

I think one of the things I would do as I stand here -- because these are very difficult situations for foster parents in British Columbia when this particular kind of story or circumstance is in the media -- is say to foster parents: "We are so grateful for the skill and the compassion that you bring to the jobs that you do." As I say, it is not an easy job, and I think to even recognize that is extremely important.

One of the things . . . . And I appreciate, again, the question, because the member referred to the memo at the time of the Mavis Flanders case. That was very much about the need for aboriginal foster homes, particularly in the downtown east side. We have made very specific initiatives with aboriginal organizations and with social work organizations, and we are actually calling on individual people and individual families to encourage aboriginal people to also be foster families. That is the memo you referred to in the first place.

But I think we could have a collective discussion, and I hope we do.

G. Farrell-Collins: I'd like to return for a moment, if I may, to a question that was raised by the member for Saanich North and the Islands. The minister stated that there were a number of complaints, two of which I believe she said were investigated: one by the RCMP and one by the Victoria police. The minister stated that there was not sufficient evidence to put forward a laying of charges, but obviously something wasn't right in this home. We know that now.

Can the minister tell us how many complaints there were, and what sorts of investigations were done within the ministry itself, over and above what the police did?

Hon. P. Priddy: I cannot tell you about the numbers, and I'm happy to find that out for you.

I would say, though, that a number of the complaints that were made were about . . . . As a matter of fact, a significant number of the complaints that were made were about access to the child and not about abuse. I'm not saying there were not those allegations and there were not investigations around that, but a significant number of the complaints or concerns that the mother raised were about access to her child. She has court-ordered access. The judge said she can only see her child under supervision. A number of her complaints were around wanting more access and so on, so they were not necessarily about the issues of abuse and neglect.

I don't have the particular numbers. I'm happy to get that for the member.

G. Farrell-Collins: The minister said that there was a fairly thorough investigation -- at least, it sounded like a thorough investigation -- done by the RCMP and perhaps the Victoria police with regard to the complaints that were laid, and there were insufficient bases to lay a charge. Can the minister tell me whether or not there was sufficient concern raised at that time? Certainly, the media reports indicate photographs being taken of bruises and perhaps of other potential forms of abuse.

Can the minister tell us whether or not the staff of the Child and Family Review Board or any other part of her ministry were made aware of those complaints, over and above what the RCMP and/or the Victoria police did? Was the ministry made sure. . .? Was the ministry comfortable that that continued to be a safe house, despite the fact that no charges were laid?

Hon. P. Priddy: I think at this stage . . . . I mean, what I do want to say about foster placement is that this is a foster mom who went through all of the same foster parent application and reference checks and letters from physicians about physical and mental health and so on that every other foster parent has.

But I would remind people that there is a criminal investigation ongoing. I have tried to be as forthcoming as I can with information, hon. Speaker, but there is a place at which I simply have to say there is a criminal investigation, and I can go no further.

G. Farrell-Collins: I certainly don't want to prejudice any criminal investigation that is ongoing. But I would think, given the focus around this case and given the time that has elapsed since it became public, that the minister would have made herself aware of how comfortable her ministry was with this foster home. I do not believe that disclosing that information and whatever reviews were done within her own ministry is going to affect the criminal investigation.

That is information that should be made available to the minister and certainly should be made available to this House, so we know whether or not the government is doing everything within its power to protect children that are in foster care.

Hon. P. Priddy: As carefully as I can, because I know none of us would ever want to be someone who put an investigation at risk because of something we said, what I do know is that this particular foster mom, because there was another child in the home, had a variety of people in and out of her home on a regular basis. One of the children was being seen four times by a child care worker, infant development workers, a physio . . . . So this is a home where . . . . And the foster mom was having ongoing, almost daily, contact with people from various parts of the ministry and the Ministry of Health.

[2:30]

The Speaker: The bell terminates question period.

[ Page 2960 ]

Orders of the Day

Hon. J. MacPhail: In Committee A, I call Committee of Supply, and for the information of the members, we'll be debating the estimates of the Ministry of Attorney General. In this House, I call Committee of the Whole to debate Bill 2.

BUDGET MEASURES

IMPLEMENTATION ACT, 1997

(continued)

The House in committee on Bill 2; G. Brewin in the chair.

section 12 (continued).

C. Clark: As I recall, we left yesterday on some interesting topics of debate that generated a fair amount of discussion in the House -- some of it useful; some of it, I guess, a little bit more marginal. Now that the minister has had about 20 hours to consider the question that I asked yesterday, I wonder if he has come up yet with

definitions for the words "certainty" and "stability," to which he likes to refer when he talks about his relationship with municipalities.

Hon. M. Farnworth: I answered that question for the hon. member at considerable length yesterday. I guess, hon. Chair, I'll repeat the answer again.

In terms of certainty, what the municipalities can expect is that over the course of this year, this government is going to be living up to the terms of the protocol agreement that was signed last September. There's going to be an extensive process of consultation on issues relating to legislation, financial matters and other areas of interest to municipalities. That's certainty; that's going to lead to stability.

C. Clark: What we understood the word "certainty" to mean the last time the government entered into this process was that there would be consultations, that they would be extensive and that municipalities would have an understanding of the kinds of cuts that were going to be levied against them by the provincial government well before they happened. None of that occurred.

Now, I think what the minister is arguing is that some of that did occur, that there were some consultations, or that there was some expectation of cuts on the parts of the municipalities. I wonder if the minister can tell us: did his consultations with the municipalities include any discussion of the level of cuts -- the huge, deep cuts -- that the ministry exacted against municipalities? Did the consultations give them any expectation of exactly how deep and how extensive these cuts would be?

Hon. M. Farnworth: I was not the minister at that time.

C. Clark: The minister, I think, will recognize what I'm trying to get at here. There is an understanding that the government -- no matter who the ministers are -- continues to exist even between different ministers. But what I'm trying to figure out here is: when the ministry said something before, even though it was a different minister, and the ministry says something now, will the outcome of the promises they made before, which are exactly the same promises they've made now. . .?

The minister appears to be indicating that even though the promises are exactly the same, the outcome of these promises will be different. Last time they made the promises -- they made the promise of consultations; they made the promise of certainty; they made the promise of stability -- what it resulted in was no consultation, no discussion. It resulted in deep cuts, completely unexpectedly; it resulted in a lack of stability and a lack of predictability. So there's the promise, and there's the outcome.

The minister seems to be indicating now that when he says certainty, stability and consultation it means that there is actually going to be discussion, there is actually going to be some certainty and there is actually going to be some predictability that comes out of it. There's clearly some difference in the way these two different ministers have defined where they want to go with this.

I think the minister will appreciate my interest in this, given the fact that this bill attempts to or does give the minister total flexibility to make cuts any time he wants without any consultation. No matter what promises he makes, no matter what memorandums of understanding he enters into, he will always have -- until the government changes -- the flexibility to be able to do whatever he wants.

What I'm trying to get to here is the difference in

definitions between the way the government defined this before and the way the government defines this today. I think the minister can . . . . What I'm looking for from the minister is some further assurance, or a little more substantial assurance, that their method of operation has indeed changed from the way the previous minister operated in his relationship with municipalities.

Hon. M. Farnworth: I will go back to the answer I gave yesterday because it will suffice for the same question today that was asked yesterday.

Look, when the minister signed the protocol, he did so after advising the UBCM that there were cuts coming, that in terms of consultation they would probably say that it wasn't long enough, that it was not able to take place and that he was reluctant to sign it. So that's what was said, hon. member.

Since that time . . . . And the members opposite claim that the period of consultation wasn't long enough. As I said yesterday, we can debate that until the cows come home, but what's important is how we take the protocol that was signed in September to deal with issues coming in the future. I've told the hon. member and I've told this House . . . . I'll give them the same message I have given to the UBCM, the same message that's been put into practice -- that is, it is my intention and it is the government's intention to consult with the municipalities on all matters concerning them, legislative and financial.

That process is in place. We've had three meetings so far this year that have dealt with a host of issues. We've agreed to have a special meeting of the joint council on budgetary matters later on this summer. That's what they want; that's what is taking place. I want to ensure that the municipalities know well ahead of time what the financial implications on our budget deliberations are for next year so that they are in a position where they can plan ahead accordingly -- where we can sit down as a government at that joint council process with the executive of the UBCM to look at how we allocate available resources -- and so that there is input and consultation.

That, hon. member, is going to lead to the three favourite phrases that you like to use, which are certainty, predictability and stability. As I said yesterday, another definition, as far as I'm concerned, is: certainly you are opposed to everything I've

[ Page 2961 ]

been saying; you are predictable in that. And in terms of stability, I won't question the stability of you guys on the other side.

But if you're looking for that commitment, I'm telling you that it is taking place, and the UBCM is quite happy right now with the consultation process that is evolving and is taking place.

C. Clark: The fact remains that the consultation that occurred which the minister is referring to, which occurred in the last round of cuts, consisted of the minister summoning the municipal leaders into his office, informing them of the cuts and then trotting out and telling the TV cameras. That was the extent of the consultation in this last round, and it is very disturbing to recognize that the minister is not prepared to tell us that he is going to give a different definition to the word consultation than the previous minister gave, because the previous minister's understanding and

interpretation of the word consultation was weak indeed. It's not a definition that is in any way shared by most other British Columbians.

Having made that point, I will happily cede to my colleague from Shuswap, who is prepared, I know, to carry on this debate very vigorously.

G. Abbott: There may be others on this side who have further comments to make with respect to

section 12. I just want to pass along to the minister, if I may, a couple of quotes from UBCM executive members. I think it gives some indication of the state of happiness, the state of satisfaction, that they have with respect to how they were treated with respect to the Local Government Grants Act amendments proposed here. I do invite the minister to comment, and I will give him equal time to comment on what's stated here.

The first quote is from the Cariboo Observer of April 2, 1997, by the UBCM president, Gillian Trumper, and it reads:

"While the provincial government protests a 28 percent reduction in transfer payments to the province over two years, the same provincial government cut unconditional grants to municipalities by 40 percent in one year. The provincial government holds the federal government to a higher standard of performance than it is willing to meet for itself."

I'd invite the minister to provide his comments with respect to that. I presume he would wish to do so.

Hon. M. Farnworth: The hon. member may wish to refer to quotes in newspapers or editorial comments in certain newspapers. What I prefer to do is to sit down face to face with the members of the UBCM executive who make up the joint council and talk over issues in a rational, reasonable way in order to find solutions and a way that we can work together. That's what I'm committed to doing, and that's what has been taking place since I became minister.

I intend to continue that dialogue. As I've already outlined to the hon. members across the way, we've held three meetings so far and we will be holding more meetings this coming year. We've addressed a number of substantive issues raised by both the municipalities and the province, and we've agreed to have a special budgetary meeting in the summer to address strictly financial issues. Those are the things that are taking place. To me, what's important is that the people I'm to deal with are at the table and getting the process that they want. That's taking place, hon. member.

G. Abbott: There's an old expression in the Shuswap -- and I expect it applies all over the province -- that talk is cheap. It's not necessarily cheap from this government, but I guess there's often a . . . .

Interjections.

G. Abbott: Yes, they spend a lot of money on it.

There is often a big gap between what is promised and what is realized. We find, particularly with this government, that there's very frequently a huge discrepancy between what's promised and what's realized in the end. Again, to remind ourselves of why we're here, we're debating whether it is appropriate, as is proposed in Bill 2, to repeal

section 2 of the Local Government Grants Act. Again, we've made this point as well as we can. The minister unfortunately hasn't chosen to embrace our views, but I think what we've tried to say here is that it's most unfortunate, particularly given the record of this government with respect to consultation, to eliminate the one element in the Local Government Grants Act which provides the -- to use that well-used phrase -- predictability, certainty and stability that we'd like to see from a local government grants act.

[2:45]

Again, I'd just like to pass along to the minister the second quote, and this was from Mayor Steve Wallace:

"Interviewed Tuesday, Quesnel mayor Steve Wallace said the province is telling municipalities to 'do as I say, not as I do. The province is whining about cuts of 28 percent, but they got two years' notice and two years to implement. Then they turned around and gave municipalities 30 days' notice for 40 percent cuts. It's a double standard on their part, something we've come to expect from this government.'"

I'd have to say that on this side of the House we certainly agree with these sentiments that have been expressed by the UBCM with respect to this issue, because this government is entirely unpredictable, entirely unstable, entirely uncertain about its direction, except for obviously wanting to rip off local governments with respect to this particular issue. On that point they are remarkably certain. At any rate, I'll invite the minister to provide any comments which he may have in response to Mayor Steve Wallace.

F. Gingell: There was a press release put out by the government on the issue of certainty, dated November 26, where they included a whole bunch of non-municipal grants in this amount. At that same time, there was notification given that certain provincial highways were going to be turned over to the municipalities. The cost of that happening has not been included in this calculation, so obviously this particular backgrounder was typical of the PR nonsense that we get. It doesn't tell the truth. Now, that had to change because the government discovered that they couldn't legally do this, as I understand it.

They can't transfer provincial highways to the jurisdiction of municipalities without agreements with the municipalities, which they did not have. But there had been included in the original cuts an amount of some $8 million which were grants that were paid by the provincial government to municipalities for the maintenance of what are called arterial roads.

In the meantime, the Ministry of Municipal Affairs scheme to increase the amount of the cuts and the downloading onto municipalities by moving some provincial highways over to municipalities and, in my particular municipality's case, a couple of bridges . . . . The Westham Island bridge and the Annacis bridge couldn't happen. There were further cuts. I know Delta's grants have been cut, in addition to the amount shown in the document which they were given, by $341,000.

At the original briefing on Bill 2, I was given a commitment by your ministry's staff that I would receive the total of

[ Page 2962 ]

the further reductions that have taken place since the November 26 backgrounder. Then again I was given that commitment on Monday, I think, when we had a further briefing on Municipal Affairs estimates, and I still don't have those numbers. So can the minister tell us the amount of the further cuts of grants to municipalities to compensate for the provincial highway costs that they were not able to off-load onto municipalities?

Hon. M. Farnworth: I don't have that particular table with me, but I can tell the member that the table has been prepared and that the numbers are being forwarded to him as he requested in the briefing. You will be getting them shortly, hon. member.

F. Gingell: I really would have liked them for this section. I guess we'll just have to keep

section 12 going until we receive them. I can assure both the Chair and the minister that we're perfectly capable of doing that.

What I wanted to do was to get a feel for what the total percentage of cuts were, because I heard the Minister of Finance talk about federal cuts in the early portions of discussion of

section 12. No one in this House, whichever side they sit on or whether they sit with an independent party, is going to support this or believe that the right thing is to increase federal cuts. I know that the minister agrees with me that what this country really needs to do is to sit down and think about the way revenues and responsibilities are shared through the three levels of government. Perhaps there will be some changes to these issues.

The minister always conveniently forgets to include the value of tax points when he talks about transfers. How much they are worth, I know not, but I do know that the value of the tax points is growing dramatically. I just ask that the minister please include those when he deals with the statements he makes. We all want to go and put pressure on the federal government not to disadvantage British Columbia, but we really do need to know the truth. We need to know the facts. The Minister of Finance, in that rather different role -- what I believe should be more of a non-partisan role -- should really make an effort. Sometimes I'm critical that he doesn't deal with all those issues.

Having said that about tax points and leaving that on one side, I would like to ask the Minister of Municipal Affairs, or perhaps the Minister of Finance, the following. Federal transfer payments in cash to British Columbia in the year 1991-92, which was the first year of this government's administration, amounted to $2.095 billion. In 1997-98, in the estimates we're dealing with this year, they amount to $1.78 billion. Would the minister agree with me that that is approximately a 15 percent cut?

Hon. A. Petter: It's hard to follow the member's figures orally. If he provides them to me in writing, I would be happy to look at them. I'm just checking my own charts, because I don't have the figures in my memory.

I do want to correct one thing he said earlier. He suggested that no one in this Legislature could possibly support the cuts on the part of the federal government that have taken place -- or could want to see those cuts increased, as I understood him. In fact, that's simply not correct, and I have in front of me some records that show it's not correct.

I'm quoting from the Leader of the Oppositon at various times in the past. From February 28, 1995, the Vancouver Sun quotes the Leader of the Opposition as saying: "The federal Finance minister Paul Martin did not go far enough in his cuts." From February 18 in the Province, I'm again quoting the Leader of the Oppositon saying that Martin hasn't gone far enough. He says that the expected deficit of between $20 billion and $17 billion is still too much, and then he goes on to suggest that the cuts should be greater.

It's simply not correct to suggest, as the member opposite does, that no one in this House has applauded the federal cuts or urged that the cuts be deeper, because the very party that this member represents, and its leader, have taken exactly that position in the past. There are a number of stories. Let me quote from Hansard. I think I quoted earlier from Hansard. On April 12, 1995, there was a quote from the Leader of the Opposition. He said: "When the federal government tabled its budget in February, the B.C. Liberals said they should have cut more."

I encourage the member to revise his memory and his history of his own position, because the position of the Leader of the Opposition has indeed been categorical and clear -- until recently, at least -- that the federal cuts that have taken place and that have produced much of the fiscal difficulty we face as a province are resulting in some of the reductions we're now making. The Leader of the Opposition has taken the position that those cuts should have been even deeper than they were, and I don't want to allow the member to escape that very important part of the public record.

F. Gingell: I have a feeling that I've heard that speech before. I wish the Minister of Finance would spend more time worrying about the finances of this province and getting them in good shape -- learning his job and beginning to understand the issues that this province faces because of their incompetence -- instead of spending his time reading out all this stuff.

I believe that all governments, whether federal or provincial, need to make those cuts that are necessary to get accounts in balance. I'm sorry that you don't, but those things need to be done. Madam Chair, perhaps the Minister of Finance would please take his pencil -- there, he's got a pen in his hand -- and write down $2.095 billion and mark it '91-92, then write down $1.78 billion and '97-98 and then tell me whether he agrees with me that that is a 15 percent reduction in the expenditures.

Hon. A. Petter: I'm searching in vain for some of the papers I had here earlier, which I quoted from, but I'll be happy to get them sent in so I can refer to them, hon. Speaker. They show that the cuts from the federal government to the province, in terms of the share of funding the federal government provides for the established social programs that the funding was targeted to, have been much greater in recent years than the proportion of cuts in terms of the share that the province provides to municipalities. That's the point the member is taking.

Rather than getting into a debate around the numbers, I would be happy to simply get the numbers I referred to earlier and re-recite them for the member's benefit.

I'm certainly not going to get onto the slippery slope with the member of agreeing to some numbers that he has produced out of thin air and then have him recite them back. What I've noted is that whenever the Liberal Party draws numbers in these matters, they make very selective use of the numbers and very selective use of the comparatives.

Interjection.

Hon. A. Petter: And yet British Columbians know what seems to so irritate the member opposite. British Columbians

[ Page 2963 ]

know that federal cuts that have been targeted at health care, education and social services have been a major source of problems not just for this province but for other provinces. The difference is that in other provinces where governments of a similar ideological stripe as the opposition party have been in power, those cuts have been passed through in areas of health care and education.

I apologize to the member if it irritates him that I quote from his own leader's previous remarks. Believe me, it usually irritates me. If we've reached the point in this province where a statement of the Leader of the Opposition being quoted back at members of his own party is irritating, then perhaps that's indicative of why people in the last provincial election felt that those kinds of positions were untenable.

The Chair: And now for a different face. I recognize the hon. member for Comox Valley -- rising on what matter?

E. Gillespie: I ask leave to make an introduction.

Leave granted.

E. Gillespie: Visiting us in the House today is Mrs. Amy Bryden and her class from Tsolum Elementary in the riding of Comox Valley. I'm very pleased to welcome these students here today, along with their teacher and their parent volunteers. This is the first class to visit while I've been a sitting member of this Legislature. Would the House join me in making them welcome.

[3:00]

F. Gingell: I didn't intend to get into a great discussion about these issues, but perhaps we should. The only transfers that the federal government makes to the provincial government are these ones that the Minister of Finance calls health and education -- and of course there is CAP, too -- but this government and the Socred government before them just treated them as money. They're not allocated within the estimates for specific purposes. They are just funds.

The point that this minister has made time and time again is that the cuts in total dollars . . . . I agree that as a percentage of expenditures in those areas, the way this government has been behaving, those expenditures have been going up. There are jobs that have fled the province, and it has had its consequences on health care costs, costs within the education system and other costs.

But when you properly and carefully evaluate and deal with apples and apples and oranges and oranges, the cuts that this government is making to the municipalities at this time -- with no notice -- I believe are 29 percent plus the amount of these additional cuts that you will be giving relative to further reductions related to the transfer of provincial highways. I believe that to be the correct comparison.

It surprises me that the Minister of Finance thinks that the proper defence of what this government is doing to municipalities, a short two years after they made a definitive promise about certainty and stability and consultation, is to talk about the way the federal government -- 50,000 miles or so away from British Columbia, it seems -- treats British Columbia. The important thing for this Minister of Finance to do, I would suggest, is to ensure that British Columbia is treated fairly in relation to the other provinces, recognizing the commitments that we as British Columbians, and all Canadians, have made to the issues of equalization.

The point that I want to make -- and the point that I really feel is critical in the discussion of this

section of the bill -- is the depth and the extent of these cuts. I believe that the only way you can properly measure that is in dollars -- that's what we are speaking of -- and in fact this year's conditional and unconditional grants to municipalities will be 50 percent of what they were in 1991-92. In 1991-92 they were $376 million; this year in the estimates book they're in there at $188 million, and that doesn't deal with this issue about the highways. So I believe they have been cut in half in that period of time.

They've been reduced from some $252 million in 1997-97 to $188 million in 1997-98, which is a difference of some $64 million, or roughly 26 percent of the amount. And that really is the issue on which I haven't heard any satisfactory responses from the Minister of Municipal Affairs.

I wonder how the member for New Westminster can go home and face the people within his community who must surely be facing the same kinds of tax increases that are going to take place all over this province. In the election, this government promised no tax increases. Well, you fudged a bit about some user fees that you're going to push up and you fudged a bit about this. When they were in opposition . . . . I mean, I don't go around with everyone's quotes in my pocket; I have more important things to do. But when the NDP were the official opposition to the Social Credit government, you can find quote after quote after quote of them saying: "User fees are taxes."

The promises that you made are being broken, but you're trying to push the responsibility for doing that onto somebody else -- onto municipal government. It was the same yesterday with the issue of . . . . You know, the long discussion where we went on about who's financing the Assessment Appeal Board and the courts of revision. The minister knows that the B.C. Assessment Authority doesn't have any income of its own. Its only income of any substantive nature is the assessment that it charges every single property owner in this province -- a certain mill rate.

If there are some reserves from previous years, it's because you charged them too much and you should be reducing taxes. We can't even get the minister to admit that this $2.6 million -- small as it is -- is going to be paid by provincial property taxpayers. It is a fact; there is no getting away from it. There's no tooth fairy that can come and put $2.6 million under your pillow at night to pay for this.

Thank you, hon. Chair, for the opportunity to say some things that have been burning a hole in my mind about this section. I'm sure there are other members of the opposition that wish to take up further issues, and I look forward to receiving the amount of these further cuts that I need to know about.

Hon. M. Farnworth: Just a comment to the member for Delta South on the last question in terms of getting the specifics for each community. The total is $5 million to the fiscal year January 1, and $8 million to the fiscal year March 31. That's the total cost; that's the total dollars we're talking about.

F. Gingell: You will note, hon. Chair, that the amount of $8 million is the amount of the reduction in the grants that were identified from the Ministry of Transportation and Highways to municipalities for looking after some arterial roads for them. So it just happens, by coincidence, that this is the same amount, because this is not the item to which I'm referring. What I'm referring to are additional reductions in municipal grants that took place after November 26, 1996, when you discovered that the provincial highways you had planned on turning over, and the Westham Island bridge and the Annacis

[ Page 2964 ]

bridge, could not in fact be turned over. Delta municipality has advised me that the grants have been cut by an additional $341,000 over and above the cuts they were originally advised of in November.

Hon. M. Farnworth: That $8 million was included in the calculation of the grant to cover those costs in terms of the arterial roads. When we took back the decision on the arterial roads, which occurred through discussions of the joint council . . . . Because the municipalities would not be doing the work for which that money was allocated, the province took that money back.

F. Gingell: So I take it that this $8 million that's included as arterial roads, Transportation and Highways, in the backgrounder, "Transfers and Services Affecting Local Governments," dated November 26, 1996, had never been paid in any prior year when the Ministry of Transportation and Highways were administering and paying for the maintenance of these highways. These amounts have never been paid before; you just put it in there to reflect the cost of these transfers.

Hon. L. Boone: This is a very complicated issue. As you know, money was allocated to municipalities to carry them over. This money was taken out of my budget and was, in fact, put in to offset the reductions, to cover the costs of the highways. There was considerable concern expressed by municipalities at that time. They were arguing and saying that it wasn't enough money, that in fact it was going to cost more to do the maintenance and that there were some long-term costs around upgrading, etc.

So we agreed as a ministry that we would take this back and review it, but in doing so we needed the dollars to continue to maintain those roads. That's why there was the takeback of that $8 million into our budget -- so that we could continue for this period of time and do the jobs. But that money was put in there to offset the costs that were going to be incurred by municipalities.

F. Gingell: Then I'm really confused, because on this sheet -- and I'd be happy to pass it over -- it shows that under the restructured system there was zero being paid. So you're now taking back money you hadn't given them.

The Chair: The member continues.

F. Gingell: If I may, you'll allow this as a subject for debate in estimates, then? Okay.

G. Abbott: I find this discussion interesting, too, because I think I may have learned something new here today about the events surrounding November 26. Just to follow up on the question by my colleague for Delta South, what we got, then, on November 26 . . . . We understood on November 26 that the net reduction in transfers to municipalities was $113 million. But in fact -- if I'm understanding the ministers correctly here -- the net reduction was $113 million plus X deduction from equalization grants, the exact figure of which we are not yet privy to, I gather.

So the net reduction as of November 26 was $113 million plus the deductions from the equalization grants, because they were not going to be doing that. Am I correct?

Hon. M. Farnworth: No, it is included in that figure of $113 million.

G. Abbott: Okay. Just to make sure I've got it right -- I know the minister would want to get it right, as well -- the minister is saying that in fact that $113 million was inclusive of the deductions from the equalization grant. This is a curious way to put it, but it's a curious situation we have. It is inclusive of moneys that the province thought municipalities were going to be spending on arterials but in fact did not. But it was my understanding that the decision to deduct from the equalization grants came well after November 26.

Hon. L. Boone: I'm not quite sure what the member is getting at. But yes, the decision to reduce that amount by the $8 million . . . . We're still going at the $8 million reduction that came back into my ministry. That was made well after the 26th. That was made after our meeting with the joint council, where we agreed that we would take back the arterial highways, that we would review that whole issue and that we would come back to the joint council after a review had taken place -- which is taking place right now.

At that time, we said: "Well, if we're going to take back the highways, then we need to take the $8 million back into our budget so that we can do the work that was going to be expected to be done by the municipalities."

G. Abbott: Good. I think I understand this in the same way that the minister does. In fact, then, the net cut -- not effective November 26 but effective, I guess, after the decision to pull back money from equalization -- to municipalities was $113 million, plus $8 million that was pulled additionally back from equalization grants. So in fact the net cut was $121 million.

[3:15]

Hon. M. Farnworth: No, it's not, because the municipalities aren't doing the highways work, so they don't have those costs. So you're taking from both sides of the ledger.

G. Abbott: Before I defer to my very patient colleague from West Vancouver-Garibaldi, could the minister answer the very important point that my colleague from Delta South raised? He then went into a kind of rhetorical flourish that allowed the minister not to answer the question, and fair enough. I'll pose it directly now. The suggestion made was that municipal transfers are about 50 percent in 1997-98 of what they were in 1991-92. Back in the early part of this government's tenure, the annual transfers to municipalities were about $360 million-plus, and now they are about $180 million. So they are about 50 percent of what they were. Is that a correct

summary of the situation?

Hon. M. Farnworth: Unfortunately, I don't have the same figures the hon. member is working from, but what I can tell him is that however he wants to look at it, the effect on municipalities is 3 percent of revenues. That's what the reduction works out to: 3 percent of revenues for half the communities in the province. So any community under 5,000, for example, did not get a reduction -- and for effective purposes, any community under 7,000. So it's a maximum 3 percent of revenues. That's what it amounts to.

G. Abbott: It's unfortunate that the minister doesn't have the figures of my learned colleague. He's extremely generous about providing that kind of information, and I'm sure he will make sure that the minister has that information in his possession as soon as possible. I hadn't intended to actually go into this issue of the 3 percent of revenues at this point, but given the minister has raised it, I think it might be a good time to canvass it briefly.

[ Page 2965 ]

The point here is . . . . And this is not something that has been generated from my mind. This is an issue that's been brought to my attention very forcefully by a number of municipalities which say that when the province says that the cuts will not amount to more than 3 percent of total revenues, they are being misleading. For example, we could have a situation where a municipality's total revenues are $10 million, but $5 million of those dollars are in-and-out funds going to regional districts, school districts, various authorities and so on.

Could the minister confirm that when they talk about 3 percent, they are not talking about 3 percent of real municipal revenues but about any revenues that may in fact have absolutely no benefit to the municipality?

Hon. M. Farnworth: In the calculations, all municipalities have been treated the same way. For example, all the money that flows through a municipality has been included in the calculation, including regional districts and school boards. It comes down to where the municipality buys its service -- whether they provide the service in-house or whether they provide the service through the regional district. They're still getting the service, and so the revenue is still there. It's based on that calculation.

What was taken out were specific revenue flow-throughs that are unique to a particular municipality. I'm thinking in particular of health boards, because that varies considerably: some participate, some don't. That's not a general program that . . . .

Interjection.

Hon. M. Farnworth: Some have community health programs. For example, Burnaby has a special enriched health budget. So however you want to slice it, having that taken out, all the services that the municipality is providing are all in the calculations, and no community is impacted more than 3 percent.

G. Abbott: Again, I don't want to sort of fly off in some tangential direction on this point, but the very fundamental point that I think needs to be made here is that when the problem -- when the province . . . . It's a Freudian slip for me to refer to them as the problem. When the province refers to the impact of these cuts as being a maximum of 3 percent of revenues, it is somewhat misleading, because there may be a whole range of revenues which are in and out and which have no benefit to the municipality. Let me give you an example of that, because I'm . . . .

Interjection.

G. Abbott: The Minister of Finance is becoming particularly interested in the subject, and I'm sure he will be delighted to hear this particular case in point.

This is from the mayor of the city of Revelstoke. The letter reads:

"It would seem that UBCM also had the understanding that the impacts of Bill 55 were to have been worked into the cut in transfers so that we experienced a maximum cut of 3 percent of that total revenue." We won't get into Bill 55 right now. "Revelstoke's gross general revenue for 1995 was $11.4 million, but approximately $5 million of that is represented by in-and-out revenue collected on behalf of the school district, regional hospitals, the regional district and several other agencies and special projects. Surely our 3 percent maximum cut should be applied to our net revenues of $6.4 million -- which would mean a maximum reduction in transfers of $192,000.

"Revelstoke's transfer cuts of $146,000, augmented by [the] $179,000 impacts of Bill 55. . .add up to $325,000 -- well in excess of the $192,000. The $325,000 would represent a 13 percent tax increase unless cuts to services are made."

I don't buy -- at least without some corroborating argument, here -- the point that somehow the moneys raised for the regional district as a matter of convenience, or the school district as a matter of convenience or regional hospitals as a matter of convenience, are revenues that in any way represent . . . . They may in some instances represent a purchase of services, but they don't always. In many cases they don't. So again, I think the point we're making is that a claim that it amounts to a 3 percent impact can be quite misleading.

Hon. M. Farnworth: Could the hon. member for Shuswap just repeat the number that he said was the cut to Revelstoke?

G. Abbott: Their gross revenue for 1995 was $11.4 million. Approximately $5 million represented in-and-out revenue on behalf of the school district, regional hospitals, the regional district and other agencies and special projects.

Hon. M. Farnworth: We calculated our cut to the city of Revelstoke on a total revenue of $7,009,198, so that's a substantial difference.

F. Gingell: The number that the UBCM came up with in the document dated February 19, "Provincial Government Budget Analysis Challenged by Union of British Columbia Municipalities," which deals with this issue . . . . It has a complete listing of all of the grants and their property tax revenues. I appreciate that the property tax revenues . . . . There will be some other revenues. But that number shows that the grant reduction as a percentage of property tax revenues is 4.46 percent. So the number is going to be fractionally lower, but it's not going to be much lower.

In 1996-97 the transfers from the federal government to the provincial government were $1.775 billion, and in 1997-98 they are anticipated to be $1.58 billion. That's for Canada Health and Social Transfer only, and it's the most advantageous calculation to make -- to your position. That is a reduction of some $190 million to $195 million in a total budget of in excess of $20 billion, which is a fraction under 1 percent. So the federal government's cut, in this current year, to the provincial government is a fraction under 1 percent; your cut to the municipalities -- to their property tax revenue -- is 4.46 percent. If you take total revenue, it probably comes down to 4-1/4 percent.

Interjection.

F. Gingell: Yes, well you can add on that, and that adds on another 8 percent to the calculation, which could drop it down to four-point-something . . . .

Interjection.

F. Gingell: No, no. No way. Because it's less than 10 percent, you can only reduce this by less than 10 percent. Go back and take Math 101.

But the issue is that this government keeps telling us: "All we're doing to you guys is what them guys have done to us guys." But the truth of the matter is that you're doing far, far more to them guys than those guys did to youse guys.

Interjections.

[ Page 2966 ]

F. Gingell: Come on.

The Minister of Transportation and Highways says that this has been happening for years and years and years. If you go back to 1991-92, when this government came into office, it's only gone down by 15 percent in dollars. But your "in dollars" has gone down by 50 percent. So don't you think you should really think this thing through and consider withdrawing the budget?

An Hon. Member: Pull this bill.

F. Gingell: Well, pull this bill and that will solve the problem. Actually, pulling this bill would be a good idea and would put them in a very interesting position.

Hon. L. Boone: And increase the debt. You want to increase the debt.

F. Gingell: No, take it out of some of these: your contingency fund, the ministry of this or the ministry of that -- whatever you think is the most effective and efficient place to take it from.

Interjections.

F. Gingell: We said the province should get out of the property tax business, first of all, and that's very different.

At any rate, with that thought, I'll leave the Minister of Municipal Affairs to think about it and to consider my suggestion. I'll pass the questioning over to some other member.

T. Nebbeling: I've been watching the procedures of the last two days with much interest, knowing that it is the minister's first time actually on the mat, having to defend something that is actually indefensible. I've been watching his body language in particular. I know we're not supposed to do this, but I had to. Especially the body language of the minister . . . .

[3:30]

Interjection.

T. Nebbeling: As the member for North Vancouver-Seymour said: "He's red as a beet." I was talking body language. Shades of colour will come into the fray a little bit later.

I should just say that when the member for Delta South was speaking, I saw a sign of relief on the face of the minister. It was clear that the interjection of a little bit of humour made him feel very comfortable. At other times, when we were actually asking questions that are very pertinent . . . . We ask them on behalf of the municipalities throughout the province. They are questions that the municipalities would dearly love to ask the minister.

Although the minister claims he is very much involved in consultation, a little bit later I want to talk about that, because I don't think the consultative process that the minister so brazenly heralds in this room as being of a constructive, joint effort-type of approach is necessarily agreed upon by the other side of that joint effort, and that is the municipalities.

One of the things that I think I learned through watching the minister over the last two days on this

section 12 -- and I understand he is new at the job -- is that I am not so sure that the minister is totally familiar with the whole grant system, in particular the general grant and what really is the base for this government giving this unconditional grant to municipalities on an annual basis. I would like the minister to, if he could do it in a succinct manner, give us a bit of a rundown of not only how he thinks this grant was actually created and when it was created, but what it was supposed to be doing for municipalities throughout the province.

If he can help me by giving me a feeling of his knowledge, then some of the questions that I would like to ask might not be necessary. Otherwise, some of the reactions that we have seen from him so far may be explained. So if the minister can give us a rundown of the grant and its purpose and incorporation, that would be helpful for me.

[J. Doyle in the chair.]

Hon. M. Farnworth: For the hon. member's edification -- and I get the feeling that no matter what I say, it won't preclude any questions that he may or may not want to ask -- I'll just tell him that the grant was initiated in 1978, at a time when revenues were flowing from all over the place. It was designed to assist municipalities in the day-to-day running of their operations.

T. Nebbeling: That's a very small part of the answer, I believe. What I would really like to hear is the criterion that made the government decide in 1978 that a formula had to be created to assist municipalities in the trials and tribulations of trying to serve the demands of the provincial government. So if I could get that criteria as well, that would give me an impression of what was indeed intended to be done with this money coming to municipalities and regional districts.

Hon. M. Farnworth: I find it interesting that the hon. member wants to know if I can go back to 1978 and what the original criteria were. I was -- what? -- 19 in 1978 and really didn't pay much attention to what the criteria for municipal grants were. But my understanding . . . .

Interjection.

Hon. M. Farnworth: Yes, exactly. Shame, hon. member.

But I guess my understanding is that they were based on the same three things then that they were based on until recently, which was population, assessment and spending.

T. Nebbeling: I forgive the minister, of course. At the age of 19, I don't think he even lived in Canada -- like myself, as well. So I think . . . . Or maybe you did.

Hon. M. Farnworth: I think he may want to withdraw that remark. I've lived here nearly all of my life.

T. Nebbeling: Well, I didn't think that member would take offence. It's just that I . . . . I take back that remark if it offended the minister. It was in no way, shape or form intended to offend him. I was only arriving that year in this country. I thought that in a discussion I had with the minister, he reflected that he also was an immigrant coming late to this country. However, I have no problem taking that back.

But what I do want to know is, you know . . . . I know the criteria as well. What I don't know is what led the government at the time to say: "Hey, listen, there's a need for municipalities and districts to get additional funding." If we look at the population, yes. If we look at the revenue and if we look at

[ Page 2967 ]

the assessment, then we have . . . . But there must be a real reason it happened and, whatever that reason, why it doesn't exist today.

Hon. M. Farnworth: I find the question somewhat puzzling. I have an idea of where the hon. member is going. But as to why it was brought in in 1978 -- you know, for what reasons -- it's probably best to go back and talk to Hugh Curtis, who was probably the Minister of Municipal Affairs at the time.

T. Nebbeling: I'm asking this . . . . I was expecting that the minister does not have much knowledge of the background, and for that reason he is uncomfortable dealing with the questions from time to time. I think it is very important that he, as the minister, is aware of exactly the reasons communities need that extra financial assistance based on population -- yes, I understand that -- and the other criteria to assist these communities. Obviously the minister is not aware of the reasons, and I will go away from this whole line of questioning.

What I will ask the minister now is . . . . The other source of revenue for a municipality or for a regional district is property tax. Property tax is collected by municipalities for the purpose of the administration of a municipality or a city. Property tax is collected for the purpose of public safety. And property tax is collected for the purpose of maintenance of road networks and municipal infrastructure. That's the only source municipalities have.

Having said that, is the minister aware -- now that he's reducing the funding for municipalities, and it's $113 million for the municipalities in total -- of what other ways municipalities have of recuperating that money? Or is the minister expecting to see property tax payers just absorb that additional money -- which means, in a sense, a broken promise for this government? One of the promises was no new taxes and no tax increases. So if the minister knows of any other source of taxation that the municipality can use that is not a violation of that minister's government's principle, then I would like to hear it.

Hon. M. Farnworth: I find the line of questioning of the hon. member interesting, because we all know that the source of revenue for municipalities is property tax. Municipalities know, as all of us know, that financial conditions have changed since 1978, when money flowed from the federal government in great largesse. It flowed from the provincial government in great largesse. It was at that time that we actually started on a long road to massive deficits, which the federal government incurred at that time. As a consequence of that, we've had to make some significant and substantial financial decisions in this decade to put the fiscal realities of the country and the province in order.

The simple fact -- and the hon. member doesn't seem to want to acknowledge it -- is that we've asked municipalities to play a

part in controlling those expenditures, in reducing the deficit. We've asked municipalities to go through the same exercise that we've had to go through. We've said: "Look, we can't afford the same level of grants that we did in previous years, and there's going to be a reduction." That occurred.

We asked municipalities to look inward for efficiencies and savings and to try and absorb the impact of the cuts, which are no more than 3 percent of general revenues for half the municipalities in the province. We protected the smallest 50 percent of the municipalities in this province, recognizing that they don't have the same opportunities as many of the larger communities do. We asked the municipalities to absorb the savings internally. You know what? Right here, the city of Victoria has done just that.

So the property tax is the source of revenue for the municipalities. It will continue to be the major source of revenue for the municipalities. And we've asked them to do what we've had to do, which is to make internal choices, to make internal efficiencies and to recognize that they're part of the solution to the fiscal problem of the nation as a whole.

T. Nebbeling: It's interesting -- maybe not interesting, but . . . . The point I notice is that every time the minister has stood up to answer my questions, he has given a pretence of disinterest in the way the member asked. I don't know how the other members are asking, because their questions were obviously not interesting.

The minister started off making a point by saying: "We have asked the municipalities to absorb some of that financial pressure that we are under." I really have to take exception to the minister using the word "asked." The word "asked" has never been part of the debate, has never been part of the dispute, was never a part of the vocabulary used during these meetings.

Every meeting -- and I have this from people who were in these meetings -- was one where the minister informed people what was going to happen, where the minister used force in his voice to tell people: "There is no other way but my way." It wasn't this minister, so I'm not going to blame him for the bombastic, dictatorial way that the previous Minister of Municipal Affairs indeed spoke to municipal leaders through the executive board of the UBCM. Never let it be stated or known or thought that municipalities asked at any time to become partners in dealing with the financial mismanagement of this government -- because that's what we're talking about.

If this government was looking at a lack of funding for certain programs and if they had the nerve to dare to look at their own programs that have added hundreds of millions of dollars to the cost of running this government, they could have found this money without going back to the property tax payers and saying: "Okay, we have hit you once; we're going to hit you again."

I'll give one example, because when I make that statement, I have to back it up. The fair-wage policy. Every piece of infrastructure that this government puts in the ground in this province, every piece of infrastructure that is built under the rule of this government, has a premium that adds up to $170 million a year in additional costs only because of the policy incorporated by this government. I'm saying that if this government was truly looking for a way of recouping dollars, that would maybe have been a very wise one to go after.

This fair-wage policy is not creating fair wages for workers. It is paying excessive wages when it is compared to the private sector -- and even often to the union sector. There would have been a source of money that this minister could really have looked at and talked about to ideology-driven members, like the member for Bulkley Valley-Stikine, and taken it that way.

[3:45]

No, the minister took the easy way out, and said: "Listen, we are the government. We can do whatever we want to do, and we're going to tell municipalities they are going to give up that money." The minister said today: "But what we didn't

[ Page 2968 ]

do is . . . . We took the small communities and gave the small communities a break. We didn't go to them; we actually gave them a little bit more money." Well, that is the first year. This bill allows the government next year to do to the small communities what they've done to the bigger communities. I have no confidence whatsoever that this minister is going to be showing compassion for smaller municipalities in the future.

I think I'm going to leave it for now. When we debate

section 13, I've got a number of questions that I'd like to see asked. At the same time, I think this bill is an affront to what's happening in British Columbia and reflects ideology rather than common sense.

Hon. M. Farnworth: I just want to respond to the tail-end remarks of the hon. member, when he talks about the smaller communities. I've given a commitment that there will be no arbitrary decision from this ministry on funds available for small communities. That's going to be something that will be discussed at the joint council between the province and the UBCM -- how the allocation takes place over the coming year. It's a decision that's going to be arrived at jointly, not arbitrarily.

It's going to take place in the context of the joint council, at which we signed a protocol last September and which, since I've been minister, has met three times to discuss -- as I remind the member again -- substantive issues that they raised and that we raised. It's evolving into a forum to resolve problems and concerns.

As I've told the hon. members and as I will tell this hon. member, there will be a special meeting later on this summer that will deal strictly with finances. At that meeting I expect we will discuss how moneys are going to be allocated in the coming year. I want input from all the municipalities as to how the allocation should . . . . Should it take place in the same way that it did this year, or should it be changed in any one of any number of combinations? That's what's going to take place, and it's going to be done through that joint council process -- the process that's currently in place and the process that's currently working.

T. Nebbeling: I'm really happy to hear that the minister has so much faith in the process of the joint council.

I wasn't going to bring it up, but here again we are dealing with a one-way street. Government believes that everything is going well, and the minister believes that he is doing a good job consulting with the communities.

Let me read you a little quote from a mayor. Mr. Chair, I'm not going to reveal the mayor's municipality, because it could mean some retribution down the road.

Interjection.

T. Nebbeling: Oh, this would not be the first time this happened, member for Bulkley Valley-Stikine.

This is after a request made by the UBCM to meet with the Premier of this province. This request was made by the UBCM on January 23 this year. One of the reasons that the mayors of the communities in British Columbia want to meet with the Premier has to do with the fact that I don't think they feel very comfortable with the joint council's way of dealing with business. One union member said:

"Union members want to meet directly with [the Premier] and not with any one of his ministers. If the province really listened to local government and they recognized the depth of the problems that we have, then I believe they would take some action."

What this says to me is that in spite of these meetings, the municipalities' representatives are certainly not getting any level of satisfaction in dealing with the minister and are saying: "The only one who can help us out, because we expect him to listen, is the Premier."

At this point, obviously, there is very little comfort in the joint council meetings. I don't want to go into hypothetical situations, but what I have heard so far of the meetings that have taken place is that they have been more focused on persuading municipalities not to go to court rather than on trying to find solutions to this unbearable financial pressure that has been put on many communities in this province. I think that's the real issue.

Hon. M. Farnworth: I am surprised that the hon. member would read a statement which is clearly in the public record and decline, for some spurious reason, to name the person that gave the quote. The comment lacks a certain degree of credibility when that happens.

I want to tell the member that one of the requests of the joint council was to be able to meet with the Premier. If the member was aware . . . . At the last meeting of the joint council, the Premier was in attendance. We had a very good meeting, a very frank and open discussion on issues of concern to UBCM and issues of concern to the province.

I find it somewhat puzzling that the hon. member would want to say the process is not working when in fact it is, when in fact that issues that have been raised by the joint council have been dealt with because the municipalities brought them up. The issue of arterial roads was raised by the municipalities of the joint council. The government is taking action on that particular issue. The issue of downtown revitalization was raised by the joint council. That issue is being addressed by the government.

A whole host of issues, hon. member, have been raised by the municipalities through the joint council process, and we've had good, constructive meetings. The municipalities raised the need for consultation over budget matters in the coming year. That's being addressed, as I told the hon. member a few minutes ago, by a special meeting in the summer to deal with allocations, to deal with what they might have to face. I have yet to hear one criticism by a member of the joint council of how the meetings have been run or of what issues have been discussed. There's not been one, hon. member.

We are embarking on a legislative package that's taking place with complete consultation with the municipalities. Legislation is not going forward unless it goes through that joint council process. You know, I've talked to municipalities throughout this province about a change -- it's time to renew the Municipal Act, because it's out of date and it puts them in a straitjacket. We've been meeting -- consultations with the joint council -- on how to do this. So there's buy-in from the municipalities to changes that are made down the road.

I haven't heard any complaints whatsoever about any of those issues which are of primary importance to municipalities. So for the hon. member to stand up and say that the joint council process isn't working reflects greatly on his lack of knowledge of just what has been taking place at the joint council table.

T. Nebbeling: I don't know if anybody noticed, but the minister is not really talking about what the issue really is today for municipalities: the money grab, the money raid of $113 million from these communities. That's a fact. The minister now talks about all the great things that he is going to do,

[ Page 2969 ]

together with the municipalities over at the UBCM, in the future. Well, that is great. But what has that to do with the $113 million that we are working on here? This is the issue.

It's great to hear the minister say: "Well, you know, we heard the problem with the highway arterial road program -- $8 million. So we dealt with it." Well, how did you deal with it? It's going to be there next year. So there is no long-term saving.

But what about the police services? What about communities that are over the population of 5,000? These communities were promised at the time: "If you go over the 5,000 population number, you will have to absorb the cost of policing, but for three years we will be partners with you. The first year we as a government will take on the responsibility of 100 percent. The second year we will take on 65 percent of the cost, and the third year we will take on 35 percent of the cost."

How do communities deal with that? Let's talk about the community I live in: Whistler. They had grants from the government in the order of $380,000. The government reduced that by 80 percent, so now they get $80,000. At the same time, as a community they've grown and gone over the 5,000 number, and suddenly they're responsible for the policing. Are they getting over $1 million the first year, as the plan always had in place? No, they aren't. They get $200,000. So there is another $800,000 that the taxpayers of Whistler will have to absorb.

Take the community of Squamish: the same thing. They're depending on grant-in-lieu money. Is this government offering their commitment that was made in the past that grant-in-lieu money would represent the value of properties in these communities? No. They get a fraction of it. Consequently, because of the grant reduction and the reduction in grant-in-lieu . . . . This community needs three more policemen. They can only afford one. Will that not have an impact on the community? Of course, it will have an impact on the community.

As long as the minister is not willing to recognize that this is part of the equation that creates the impact on the communities, and as long as he pretends that everything is glorious and well and that everybody thinks he is a great minister when he meets with the joint council, we're never going to deal with these issues. But it is these issues that really are at the forefront of the moods in the communities that are affected by these cuts. The minister has to acknowledge it.

If he does, then maybe he will become what the mayor of one of these communities is asking for: a partner in solving the financial consequences they have to face as communities.

The minister is not willing to do it at this time. I don't know if it is because he's a new minister, but I think he's ignorant when he talks about the consequences of the action of this government. When he as a minister believes that everything is just glorious and rosy in the communities of British Columbia, I'm sorry -- he is not seeing it through the right glasses.

[4:00]

G. Abbott: Undoubtedly, the most contentious portion of Bill 2, which we are debating here, is this section. I think that all of my colleagues on this side of the House have exhausted their questions and their observations with respect to

section 12. I do want to say, though, as we move along here, that the repeal of

section 2 of the Local Government Grants Act --

section 12 in Bill 2 -- is indeed a very sad moment in the history of relations between the province and its municipalities. Unless we've been more persuasive than I think and members opposite do not want

section 2 to be repealed, not only will we be losing

section 2 of the Local Government Grants Act with the passage of this

section but also we will be losing that very brief interval between 1994 and the present, when there was some stability, predictability and certainty in local government transfers in this province. I don't think that this is a moment that is going to be soon forgotten. I expect as well that this is a moment that this government will come to regret for some time into the future.

Section 12 approved on the following division:

YEAS -- 36

Evans Zirnhelt McGregor Boone Hammell Streifel Pullinger Farnworth Kwan Waddell Calendino Stevenson Bowbrick Goodacre Giesbrecht Walsh Kasper Orcherton Hartley Priddy Petter G. Clark Dosanjh MacPhail Cashore Ramsey Brewin Sihota Randall Sawicki Lali Gillespie Robertson Smallwood Conroy Janssen

NAYS -- 33

Dalton Gingell Reid Campbell Farrell-Collins Plant Sanders Stephens de Jong Coell Nebbeling Whittred Thorpe Penner Weisgerber G. Wilson Neufeld Barisoff Krueger McKinnon Masi Nettleton Coleman Chong Weisbeck Jarvis Abbott Hawkins Symons C. Clark Hansen Reitsma J. Wilson

Hon. G. Clark: I'd like to ask leave to make an introduction.

Leave granted.

Hon. G. Clark: We have in the gallery today an old friend of mine -- a current friend of mine -- Ren� Wattell. Ren� is the business manager for the Iron Workers Union, Local 712, my old employer. Ren� is someone I signed up into the Iron Workers Union, and he's now the business manager. I'd like all members to make him welcome.

Hon. J. Cashore: I ask leave to make an introduction.

Leave granted.

Hon. J. Cashore: I'd like the House to recognize in the gallery two residents from Coquitlam, both very strong advocates for social justice: George and Mary Porges. Would the House please make them welcome.

I. Waddell: I am rising not as a former employer of the Premier but to ask leave to make an introduction.

Leave granted.

I. Waddell: Actually, the introduction has been given, but I would like to reintroduce and further introduce my old

[ Page 2970 ]

friends -- well, he is an old friend -- Mr. and Mrs. George Porges up there. I want to give my best to them and welcome them to the House.

section 13.

G. Abbott: I'd like to begin our discussion of

section 13 by inviting the Minister of Municipal Affairs to advise us, based on

section 13, of his view of how municipal grants will be determined in the years ahead.

Hon. M. Farnworth: The grants will be administered in terms of replacing the old structure with the new structure, which is the small communities protection grant and the municipal equalization grant.

G. Abbott: I appreciate that response. I was aware that those are the two components that now replace unconditional grants. The question I'm asking is a slightly more specific version of that. How will those grants be determined from year to year? How does the minister anticipate -- for example, in 1998 or 1999 -- that those will be determined?

Hon. M. Farnworth: I'll answer the question in two parts. There's a formula in place which is used to determine the grants for this year. In subsequent years that formula will be up for negotiation with the municipalities themselves through that joint council process.

When I talked to the hon. member earlier on in

section 12 about how it's my intention to consult with the municipalities on what moneys will be available . . . . I also want at that time to consult in terms of how we apportion those revenues. There's going to be some input from the municipalities. It may not stay exactly as it is this current year.

[4:15]

G. Abbott: Again, I don't want to put words in the minister's mouth. I'm trying to come to grips with where we're going in the municipal grants area. The minister can correct me if this is not a correct

summary of what he said there. I think I heard him saying that grants may be based on any number of factors, that the formula is very open-ended at this point in time and that the province doesn't have any preconceived notions of how the formula will be determined. Rather, that will be left to a consultative process involving the joint council. Is that a correct

summary of what he intended to say?

Hon. M. Farnworth: Could you repeat the tail end of what you just said?

G. Abbott: I'm not sure I can do it quite as eloquently as I did previously. The question I pose is: is the following a correct

summary of what the minister said? That the government, at this point does not have any preconceived notions of how the grants will be determined; that the formula is quite open-ended at this point in time; that there may be a number of elements that come into play -- presumably the ones listed here in

section 13; but that the determination of what that formula will be, ultimately, is something that will be determined through the consultative process in the joint council.

Hon. M. Farnworth: The components of the formula, as outlined in

section 13, will be there. But in terms of the relative value of each of them, in terms of do I have a preconceived outcome -- how it will be at the end -- no. What I want to get to is . . . . I'll go in there and say: "Okay, here's how we did it last year. What do you see as being the most equitable way of apportioning the revenues that are available? Where do you think the emphasis should be?"

There has been some debate within the UBCM already. There are municipalities saying: "Look, the small communities protection program should be maintained." Some say: "There should in fact be more emphasis on that." Others say: "Well, no, we think that there needs to be a more equitable treatment of every community across the province." So those are the types of things that I think we need to hash out at the joint council process.

In answer to your question: do I have a preconceived idea of where it will end up? no, I don't.

G. Abbott: I appreciate the frankness of the minister's comment. I think that's good, and in some ways I think the approach is a commendable one. Again, I want to lament what we've just lost in the last section. I'm not going to revisit that at this point, but I do lament it. Given the direction of the government, it's good that you have adopted the joint council approach and that there will be some consultation in the determination of grants.

One of the advantages to the Union of B.C. Municipalities and its executive is that it tends to reflect the varied interests among municipalities: the small municipalities, the villages, the regional districts, the large municipalities and so on. Again, that's very good. Frequently -- generally always -- the UBCM executive reflects that diversity. In some respects the joint council representatives from UBCM may also reflect that diversity, but not necessarily so. You're getting into a smaller group of representatives when you get to the joint council level.

My next question really flows from that point. Does the minister anticipate some broader consultative process in addition to the discussions that go on with those members of the UBCM who are fortunate enough to be represented on the joint council?

Hon. M. Farnworth: The member actually raises a very interesting and a very thoughtful point. It's something that I have given some thought to. It's a topic that I have discussed with the joint council, because some municipalities have raised it with me.

The approach I am taking right now is to recognize that how the . . . . This is one of the challenges in terms of getting this joint council process to work. Let me back up a second and deal with that. We are still at the early stages. It's not just something that is cast in stone right now. It is going to evolve over time, and one of the things I see happening is that as municipalities come to realize the importance that it's going to play, both in legislative issues and in financial issues, there will be greater awareness and probably a greater degree of wanting to participate.

In fact, I expect you will see an evolution over time in who participates and perhaps even in the structure of the UBCM or the joint council itself. But that's an internal matter for the UBCM; that's their decision to make.

One of the things I think will happen -- and it's a challenge that I face and that the cabinet ministers at the joint council process representing the provinces face -- is to make my colleagues aware of how it works and the importance that it plays, in terms of ensuring that we're aware of legislation that's affecting municipalities. The UBCM members have the same challenge, which is to make their members aware of the issues that are being discussed.

[ Page 2971 ]

The executive of the UBCM is substantially larger than the membership of the joint council itself. You are correct that the table officers, so to speak -- the top four positions -- don't always reflect the geographic diversity of the province. The executive does represent all the regions there are, with representatives from villages, regional districts, large interior urban centres and Vancouver. You do get the whole range. My impression of how it's working so far is that there is a fair degree of consultation with the executive by the UBCM members on that joint council process before going to a meeting.

You do raise a good point, and I share that concern. At the same time, the evidence so far, as I see it, is that the issue is being addressed internally by the UBCM. Certainly the table officers -- the UBCM members on the joint council -- are aware of it, and they're taking steps to ensure that there is a range of consultation.

Having said that, in terms of my taking it on to ensure a broad range of consultation, I think that would be a bit presumptuous of me, having committed that the joint council will be the primary focus of discussions. That's how I see the issues being introduced being dealt with there. If out of that, we agree to say that maybe we need to expand it, then we should. But that's the approach I want to take.

G. Abbott: I appreciate the minister's response, and I think that's a responsible way to proceed. Again, I don't disagree at all with the minister's assessment about the way in which the UBCM attempts to communicate with their members. I think they do a very good job of it, and I'm sure the minister concurs. The joint council, hopefully, reflects quite well the structure of the UBCM table officers, etc.

Again, the only point I would make is that I think -- and the minister is probably not going to agree with this assessment -- that there have been grave and very considerable failings in terms of consultation in recent months. I believe the minister has a big job ahead of him in terms of re-establishing some trust and respect between the province and local government. I don't expect him to leap to his feet and agree or disagree with me here. I think I'm stating a fact here, and it's not going to be politically expedient for the minister to agree.

I believe it to be the reality of the situation in British Columbia today. I do encourage the minister -- in the process of developing the new formula or determining the weighting of the different elements in the formula -- to perhaps go that extra mile in the year ahead and try to give municipalities and regional districts in this province a sense that they have been asked what their view is with respect to these issues. I know the minister is a seasoned politician and appreciates that even if it's just being given an opportunity to state a position, the opportunity is appreciated. I do hope that the consultation is widely held.

With that, I would like the minister just to confirm what I think is a fairly straightforward question, and that is that the formula -- if we can call it that -- for determining grants in the future under the terms of this Bill 2 may be any one of, or a combination of, those items listed between subsections (

a) and (

e) of new

section 3.

Hon. M. Farnworth: That is correct, hon. member.

G. Abbott: So, for example, the minister may choose to determine that in 1998, municipal grants will be based exclusively on subsection (

a) or subsection (e), if he should so wish it.

Hon. M. Farnworth: Technically, the answer is yes, but the decision is not one that I would make solely as a minister. It is a cabinet decision that would be done by order-in-council.

G. Abbott: I do appreciate that in some respects the minister may choose to use all five; he can use one -- whatever. There may be a range of circumstances that come into play in his determination. What I'm obviously concerned with here, as the critic for Municipal Affairs, is the bill itself as it is laid out in front of me. As the minister has acknowledged, any one of these elements or any combination of them could technically be used in determining grants from year to year. The minister can correct me if I'm wrong in that little

summary.

There is one question -- if I can kind of interrupt the flow here for a moment -- that I should have asked a couple of questions ago. The minister suggested that the small communities protection grant and the equalization grant would take the place of what I think were referred to as municipal general grants. I guess that's different than unconditional grants. The old

section 2, which we just repealed -- or are in the process of repealing -- referred to municipal general grants. Where in the statute is there reference to the small communities protection grants or equalization grants?

[H. Giesbrecht in the chair.]

Hon. M. Farnworth: They are established by regulation under or through

section 3.

[4:30]

The Chair: Member.

G. Abbott: Thank you, hon. Chair, and welcome. Knowing your own background and interest in these matters, I'm sure you will enjoy with some rapt fascination the discussion occurring here.

If I may . . . . In my rhetorical flourish, I almost forgot my question. Just to confirm, then: we will never see the expressions "small communities protection grant" and "equalization grant" in statute. Those will only appear in regulations -- what's the term? -- subsequent to this bill.

Hon. M. Farnworth: That is correct, hon. member.

G. Abbott: Could the minister advise whether any of the five elements listed in subsections (

a) to (

e) in any way, in a technical or legal sense, fetter the ability of the government to determine municipal transfers at any level which they deem to be appropriate?

Hon. M. Farnworth: No. We set the grants; it deals with the allocations. So it doesn't deal with the level of the grant.

G. Abbott: So, for example . . . . Hon. Chair, excuse me. Almost a lapse there, but I caught myself at the last moment and prevented another unfortunate breach of parliamentary conduct here.

To the minister: is there anything, then, in subsections (

a) to (

e) which would, for example, prevent the minister and this government from determining municipal grants in 1998 to be zero dollars and zero cents?

Hon. M. Farnworth: Before I comment, hon. member, I just want to say that I could give you a detailed explanation. But in a short lapse, knowing that by giving this answer I'm going to make the member for Okanagan West's day, I'm only going to say a one-word answer: no.

[ Page 2972 ]

G. Abbott: Thank you for the brevity of that answer; not necessarily thank you for the content of it. But we do salute the minister for the brevity of it, and for the honesty.

Again, I think the problem here is that with the repeal of

section 2 and the complete emphasis in

section 3 on determining grants, we are literally stripping away all of that predictability, certainty and stability from year to year.

The minister can certainly respond to this by saying: "Well, I am a wonderful, responsible, forward-thinking minister." I'm sure he would be right on all counts in saying that. But we are passing a statute here which may live for some time in the province, and other future Ministers of Municipal Affairs may not be as benevolent as the current occupant of that chair. So should we not be concerned with the direction that we're going here?

I would never want to introduce a rumour into the House, but one of the rumours that I've been privy to recently is that municipal transfers will in fact be zero dollars and zero cents by 1999. I guess I'm asking the minister what kind of assurances he can give through this bill that that ain't going to be so.

Hon. M. Farnworth: I guess this relates back to a question that took place in an earlier section. The short answer is that if our economy is doing fine, and provincial revenues are in, and we're not getting the transfer download from the federal government, and there are revenues, and we have money for programs and our key areas that we want to protect in terms of health care and education -- that there's funding there -- then I fully expect that we would see the same level of funding, if not an increase, in future years.

We can't tie the hands of the government in terms of where the allocation of resources takes place. If, for example, pulp prices and lumber prices drop at the same time, and you're seeing a reduction in provincial revenues, and the public is saying, "Look, our key areas of priority are health care and education," and -- to quote the member for Delta South, who earlier on in debate this afternoon said, "We need to make the cuts we need to make to balance the budget . . . . " Then we may have to go through an exercise again of identifying areas of expenditure reduction. At that time we may have to revisit the issue of transfers to municipalities.

Interjection.

Hon. M. Farnworth: What I've said, hon. member, is that I want to get to the point where we're able to say to municipalities well ahead of time, well ahead of their budgeting process, "Look, here's what our financial targets are for the coming year; here's where we need to go; here's what it looks like for the money available for municipal transfers this year," and then sit down and discuss how we allocate them.

I can't predict the future, hon. member, and neither can municipalities. But what I want is to try and get us to some sort of point where we're able to notify them ahead of time and we're able to have some discussion around what's available.

G. Abbott: Again, I appreciate the frank acknowledgment by the minister that all of those elements in the Local Government Grants Act that ensured stability, predictability and certainty have been stripped away. Effectively, that's what has been said here. The minister says: "We're doing that to protect health care and education." Were it not for the fact that this government wastes millions and millions of dollars in a whole range of areas apart from health and education, I'd say: "Great. " But there are far more than two areas of expenditure by this government in British Columbia. I think that before they reduce municipal transfers to zero, they ought to look at a number of those areas.

As well, there's a very important point here that I think has been lost on this government, perhaps deliberately. Maybe it has not been lost at all; maybe it's just something that is strategically overlooked or ignored so that it doesn't become an embarrassment. That very important point is this: municipal transfers, in some very considerable measure -- in fact, in large measure -- are a reflection that municipalities and regional districts undertake important work which would otherwise be the responsibility of the provincial government.

Grants have been around long enough now -- and, I guess, municipalities have been around long enough now -- that this very important fact has tended to be forgotten.

The reason why it rings important to me is that prior to me having the honour of being elevated to this chamber, I spent quite a number of years on the council of the district of Sicamous. Before that community incorporated in 1989, roads and a whole range of services in the community of Sicamous were the responsibility of the provincial government. For example, all of the streets in the community were maintained by the provincial government or its contractor.

When the municipality incorporated, it essentially made a kind of business deal, I guess, with the province, that said: "In exchange for municipal grants, we will undertake to maintain roads, to do a whole range of things which otherwise fall into the area of responsibility of the province."

So I think it's important for this minister and for this government to recognize that municipal transfers are not subsidies, as the Premier referred to them in his rather unfortunate infomercial of last fall. They're not subsidies at all. At the heart of them is a recognition that municipalities and regional districts do things for the province which, if they didn't do them, would be to the financial detriment of the province. Regional districts and solid waste management is a good example of this.

So I think that when the province are looking at this whole issue of municipal regional district transfers, they need to bear this in mind -- that they're not just doing this out of some kind of largesse or a kind of subsidization of the local level of government but that in fact the local level of government is doing things for the province which otherwise would be their responsibility. I'd be fascinated to hear the minister's response to that suggestion.

Hon. M. Farnworth: My initial response would be that local government works best when residents get the services they want to pay for. I understand what the member is saying, but I also think there's a reality that has to be addressed. He made some comments in terms of where expenditure reductions should take place, and he said there's a whole host of areas besides health care and education which should be looked at. Those areas include environmental protection; they include social services; they include a host of areas that are priorities for the people of the province. There's an importance attached to each and every one of them.

Municipalities are important, the environment is important, and health care and education are important. What you have to do is look and say: what are the core responsibilities in terms of the province, and where are our first priorities? When you ask most people in this province, it's fund health care and education.

What we have to do next is what we did, which was to say: "Look, municipalities have a role to play in expenditure

[ Page 2973 ]

control." One of the problems that municipalities face is that they're fettered by a Municipal Act which restrains their ability to deliver services. Funding is one component. It's an important component -- I don't deny that. And I don't deny that municipalities are upset at the grant reductions. Had I still been on the council in Port Coquitlam, I probably would have been upset, as well. But that's just the here and now.

What municipalities are doing is making choices, and they're doing that on an ongoing basis. It wouldn't matter . . . . I shouldn't say it wouldn't matter. Regardless of where we are in terms of transfers, those choices of where they want to expend their funds would continue to take place.

One of the key things that's important, and one of the key areas that we need to address, is some of those legislative changes that allow municipalities greater flexibility in how they manage the resources that they have and in how they deliver the programs that they have. By changing some of those regulations under which they operate, they would be able to achieve either greater efficiency, new sources of revenue -- or potential new sources of revenue -- or more creative ways of administering the authority that they have.

One of the complaints . . . . What's been asked for -- and comes up at the joint council discussions on a frequent basis -- is: "We understand the government's financial decision. We don't like it, but we understand why you've done it. And we know that it's not going to change, so we have to live with that. But what we want you to do now is allow us, by making changes in the Municipal Act, to better manage the resources that we do have and better manage the opportunities that are available to us by removing some of the constraints, by allowing us to do things a little differently than we've been doing them in the past."

[4:45]

Interjection.

Hon. M. Farnworth: I call it common sense. It's something that I've been advocating for a long time, and it's been advocated by the UBCM. There are a lot of outstanding issues that need to be addressed, and I know that this is getting a bit into estimates debate, hon. member. But the point in the question you raised is one worthy of some discussion, because it's a natural consequence of the grant reductions. If we're doing that, then I think we have to be prepared to make changes to give municipalities more authority and more power. That's the direction that I see us moving in.

G. Abbott: I appreciate the full comments of the minister. But again, the way we have to look at this thing is all based on what appears before us in this bill. Talk is cheap. I think if we had in the past six months seen any kind of shred -- any kind of shadow -- of similarity between the approach that the minister has just outlined and the approach we actually saw from this government as a product of the way they've treated local government, then we'd say: "Great!" But there is no shred of similarity between the approach outlined by the minister and the way that municipalities have been treated through this whole very sorry exercise of gutting the Local Government Grants Act.

Again, this is not meant to disparage the current minister. I know from many of my friends in local government that the present minister is making an attempt to call them and to try to make them feel that they're part of the loop. And all that is very good. I salute the minister for that. Again, though, what we are dealing with is a bill that is going to confer on the provincial government absolutely dictatorial powers in terms of the way in which municipalities can be treated by the province, if the minister chooses to. It makes it very, very difficult to say a kind word about this bill, when it confers that kind of authority on the provincial government in relation to local governments.

For example, we could find the sort of unfortunate and kind of ironic situation where in 1998 -- or 1999 or the year 2000 or whenever it may happen to be -- a small community opens up an envelope from the province that announces that their small communities protection grant allocation for 1999 is zero dollars and zero cents. I'm sure the minister would say: "Well, no, that won't happen." But, in fact, it most distinctly can happen under the provisions of this bill. The minister, I think, has admitted that.

I want to also comment -- and I guess this gets us to a more general level -- about the minister's comments concerning the way in which relations should be conducted between the province and its municipalities. I saluted the minister . . . . I'm saluting the minister a lot today. I don't know why I'm doing this -- probably because this is all getting ready to slam him in a little while.

I mentioned the other day that I welcomed his conversion, his borrowing, his lifting of the joint council concept from our community charter. I think that's a great step ahead. It's too bad that that hadn't been lifted a little while ago by this government. Perhaps the whole sorry scene of the last few months might have been avoided -- probably not. Obviously there are some fiscal realities being pursued by this government which made inevitable their $113 million ripoff of local government in recent months. But nevertheless, maybe the joint council might have helped in some way. So it's great that the minister is moving in that direction.

He now advises us that in a range of other areas -- the elimination of regulation, the streamlining of the Municipal Act . . . . This is excellent, as well, and I really welcome the conversion of the Minister of Municipal Affairs to the concepts of the community charter in that regard as well. In terms of local empowerment, the minister has indicated that what this government wants to do is empower local governments to make them more responsible for their own destinies and free them from a range of unnecessary regulations from Victoria.

Interjection.

G. Abbott: Absolutely. I couldn't have put it better.

S. Hawkins: What did he say?

G. Abbott: I believe he said: "Eliminating the shackles of. . .?

Hon. M. Farnworth: The yoke and shackles of running-dog imperialism.

G. Abbott: The yoke and shackles of running-dog imperialism. Well, I don't know if I could quite put it in those terms, not being able to embrace some of the socialist dogma that perhaps the minister enjoys.

But it is good . . . . I think it's excellent that he is proposing to do that. I think, however -- and maybe the minister will want to go on and agree with me here as well -- that there is an important difference between what we proposed to do in our community charter and what this government has in fact done in recent weeks and months.

[ Page 2974 ]

That is that the whole of our community charter is based on the notion of consultation and concurrence between provincial and municipal levels. Further, it is very much based on the proposition that in the devolution of responsibility to the local level of government, there are resources that should accompany that devolution, as well. That's one of the reasons, for example -- and the minister may want to comment on this -- that we have in our community charter a commitment to returning 75 percent of traffic fine revenue to local government for the purpose of youth crime programs, anti-vandalism programs, more policing and those kinds of things.

So what we have -- and I think this is where the current government hasn't quite yet captured the essence and spirit of the community charter -- is that if you are going to devolve authority to the local level of government, you must also devolve resources to go along with it. I invite the minister's comments on my comments.

Hon. M. Farnworth: I'm impressed. I'm really impressed with the hon. member, because here I thought that in all those municipal conferences we have been to together over the last few months, he wasn't paying attention to my speeches. I see that he was, and I am touched.

I think it's wonderful, because I can tell you, hon. Chair, that one of the things I have constantly said since becoming minister is that not only do we have to empower communities, and not only do we have to reduce the Municipal Act -- which at over 1,000 sections is the largest provincial statute on the books -- and make it more suited to the needs and the aspirations of municipalities, but we have to do it through a consultative process. We also have to address and recognize that they do need some resources. It is time to put to rest some of the outstanding issues that have been bugging municipalities for a long time.

One of the key ones that I am so glad my hon. colleague across the way mentioned was the issue of traffic fines. Since taking on this position and in instances before that, I've said that it's inconceivable that since 1984, when I attended my first UBCM convention . . . . The issue of traffic fines and traffic fine revenue was a resolution at that convention. It has been a resolution at just about every convention since then, and I think it's time we addressed the issue.

I can tell the hon. member that at the last meeting of the joint council, we raised that issue, and we're dealing with that issue because I think it's time we put it to bed. It will give municipalities some more financial resources, and at the same time I think it's also an important way of addressing problems around public safety.

So yes, hon. member, it's something that is at the joint council table. It's something that I think needs to be done, and I can tell you that it's an issue that I, the Attorney General and the rest of the representatives of the government at the joint council table are pursuing and working on.

G. Abbott: Delight is absolutely bouncing back and forth across the chamber here today. This is some kind of love-in, I have to say. It's a disturbing new trend here in the Legislature of British Columbia that this is occurring.

While the minister is primed and warm -- a finely tuned machine -- I just want him to confirm that what he has just said, and I'm sure he will want to state it unequivocally now, is that there will be no devolution of responsibility to municipalities and regional districts without a corresponding devolution of resources.

Hon. M. Farnworth: I think we need to separate two issues. The issue of traffic fines and revenue is a longstanding issue, and it is not tied to the devolution of authority.

In some areas, devolution of authority doesn't anticipate resources being transferred. What it may anticipate is the elimination of regulation. It may anticipate or may require the elimination of approval processes. It may be a recognition that the province . . . . For example, we're currently engaged in negotiations with the GVRD around the areas of transit and transportation, and the funding and how you pay for it is part of those negotiations. That's something that's being negotiated.

I think it's slightly erroneous to suggest that a devolution of authority automatically requires a devolution of resources; the other side of that is that some devolution of authority may well require the devolution of resources. But I want to tell the hon. member that the approach we're taking is that discussion takes place at the joint council level. That's the process in place, and I think that's how we're going to come to some sort of agreement. It's not my desire to see it work any other way.

G. Abbott: That wasn't quite the ringing endorsement of the proposition I had hoped for. I appreciate that the minister is trying to signal to me here that these are issues that the joint council level will occupy itself with in the future and that he wouldn't want to boldly enunciate a principle when there are all kinds of details to be sorted out at the joint council.

But, again, I think it's important to recognize that we're dealing with Bill 2 here. We are trying to anticipate what the new world of provincial-municipal relations is going to be like in the post-Bill 2 era. It may not be pretty. I want as much as possible here to learn from the Minister of Municipal Affairs the manner in which, broadly speaking, local government will be treated by the province in the years ahead. I think the point I was making about responsibilities on the one hand and resources on the other is in fact a very important one to be considered in the context of this bill.

Now, the minister rightly points out that in some instances, a shift in responsibilities doesn't necessarily require a shift in resources. However, I would suggest to him that in virtually all the cases I can think of -- at least where, realistically, over the next five years, ten years or 20 years, responsibilities will be shifted to the local level of government from the provincial and perhaps even from the federal government . . . . In virtually every case, these are in fact the areas where there are going to be very significant costs to local government.

[5:00]

Just off the top of my head, the ones I can think of that are probable areas of devolution to local responsibility . . . . Health is certainly one area where, for example, provincial health inspectors may at some future point become regional district or municipal health inspectors. A number of the positions in the provincial health bureaucracy may become the responsibility of local government. That will, in a very direct way, become costs to the