2003 Legislative Session: 4th Session, 37th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, FEBRUARY 26, 2003

Afternoon Sitting

Volume 11, Number 16

CONTENTS

Routine

Proceedings

Page

Introductions by Members

Introduction and First Reading of Bills

Freedom of Information and Protection of Privacy Amendment Act, 2003 (Bill 13)

Hon. S. Santori

Statements (Standing Order 25 b )

2010 Olympic Games benefits to Burnaby and Coquitlam

H. Bloy

Contributions of teachers and support staff

S. Brice

Safe schools

L. Mayencourt

Oral Questions

Fair Pharmacare program and Pacific Blue Cross contract

J. MacPhail

Hon. C. Hansen

J. Kwan

Facilities and services for seniors in Creston

B. Suffredine

Hon. K. Whittred

Funding formula for policing services in small communities

B. Bennett

Hon. R. Coleman

Apprenticeship and skills training model

B. Lekstrom

Hon. S. Bond

Huntington border crossing

B. Penner

Hon. J. Reid

Programs and services for aboriginal youth

K. Krueger

Hon. G. Abbott

Committee of the Whole House

Energy and Mines Statutes Amendment Act, 2003 (Bill 10)

J. MacPhail

Hon. R. Neufeld

D. Jarvis

P. Nettleton

B. Penner

B. Kerr

R. Hawes

J. Kwan

[ Page 5059 ]

WEDNESDAY,

FEBRUARY 26, 2003

The House

met at 2:03 p.m.

Prayers.

MacPhail: I rise today to send a message through all of us to Fred Jackson.

Fred was the MLA from 1991 to 1996 for Kamloops–North Thompson. Fred is now in

the hospice in the Royal Jubilee Hospital and has just a few days left with us.

He does have moments when he is lucid and with us, and I thought it would be

appropriate now for all of us to wish him well, to wish him the best in his next

journey.

[1405]

He was an

MLA that many of us knew to be very strong — not only strong in voice but

strong in idealism and strong in his closely held views on so many matters. He

was compassionate, a strong advocate of workers' rights, and he didn't always

toe the party line either, as some of you may well recall. Anyway, I saw Fred

today, and I just thought it's better for us to send a message to Fred sooner

rather than later. We wish you well, Fred.

K. Krueger:

I want to thank the Leader of the Opposition for her remarks and also to convey

my best wishes and respect to Fred. We spent considerable time on the election

trail together. Many of my constituents have many kind things to say about Fred,

who represented them for five years in this House. My sincere best wishes and

sympathy to his family. Fred, I wish you peace, and it was good knowing you.

Hon. G.

Campbell: I join with the other two members to speak of Fred and the

contribution he's made to the province and to the people that he clearly loved

and served. We'll all miss his deep voice — his Scottish accent will

particularly be missed — but what really will be missed is a life that was

lived well, that was lived in the service of others. I am glad to join with all

members of this assembly in sending my best and our prayers to Fred and his

family.

Mr.

Speaker: Hon. members, if it is the wish of the assembly, we will send best

wishes on behalf of all MLAs.

Introductions by Members

Hon. S.

Hagen: In the precincts today, we have a large group of students from G.P.

Vanier Secondary School in Courtenay together with Mr. Dave Neill, Mr. John

Carswell and Ms. Joan Longtin. Would the House please make them welcome.

Belsey: I have two more visitors from Prince Rupert, other than the cooks

that were here last night. Joining us in the gallery today are two good friends

of mine from Prince Rupert, Ed and Rosemary McCarter, originally from Scotland

and now living in Prince Rupert. I wish the House would join me in making them

welcome.

H. Bloy:

It gives me great pleasure to introduce in the House today industry leaders of

the grocery trade here in British Columbia and across Canada. We have Bryan

Walton, vice-president of the Canadian Council of Grocery Distributors; Mark

Synott, chief financial officer, vice-president and director of Canada Safeway.

We have David Ryzebol, public affairs and director of Westfair Foods and the

Real Great Canadian Superstore; David Gibson, executive director of Thrifty

Foods; and Lorne Campbell, vice-president, grocery growth and development for

Thrifty Foods. Will the House please join me in making our guests welcome.

D. Chutter:

We have with us today a constituent of mine, Bernard Schulmann from Lillooet.

Will the House please make him welcome.

J. Kwan:

I see in the visitors' gallery today a group of legislative interns, some of

whom I met with yesterday and had a nice chat. They'll be starting in the

Legislature to assist the members of the House on Monday. I would like the House

to please welcome them — and especially from my colleague the MLA for

Vancouver-Hastings, the Leader of the Opposition, a special welcome to those who

are going to be working with our caucus, because we need all the help that we

can get.

[1410]

Hamilton: Today we have visiting with us my constituency assistant, Val

Terry, and her son Greg. Would the House please make them welcome.

Hon. G.

Bruce: I, too, would like to welcome the members from the grocery trade

here. There couldn't be a greater, finer group of people than what we have here

in the gallery. It's a pleasure that I have people who really know what the

price of a pound of butter is and the price of eggs is — and a loaf of bread.

I have

another reason to rise. I would like to introduce Miss Jill Smukowich. She is

the daughter of my executive assistant, but more importantly, she's also one of

the very few friends that I have.

Introduction and

First Reading of Bills

FREEDOM OF INFORMATION

AND PROTECTION OF PRIVACY

AMENDMENT ACT, 2003

Hon. S.

Santori presented a message from Her Honour the Lieutenant-Governor: a bill

intituled Freedom of Information and Protection of Privacy Amendment Act, 2003.

Hon. S.

Santori: I move that Bill 13 be read a first time now.

[ Page 5060 ]

Motion

approved.

Hon. S.

Santori: Bill 13 amends the Freedom of Information and Protection of Privacy

Act. In response to a comprehensive review of the legislation requested by the

Premier, the intent of the review was to increase openness and reduce compliance

costs. The amendments in Bill 13 increase the ability of the information and

privacy commissioner to meet operational responsibilities, improve privacy

protection by extending the privacy provisions of the legislation to include

records that may not be in a public body's custody but are under its control,

and provide a generic reference to the archives of the government.

It will

clarify the requirements for the use of research agreements under the act,

clarify the requirements regarding notification for the indirect collection of

personal information, add a public body to the definition of a local government

body and refine the definition of an educational body, and ensure the protection

of solicitor-client privilege for records provided to the information and

privacy commissioner.

The changes

in Bill 13 are supported by stakeholders, will clarify the original intent of

the legislation and will improve the privacy protection afforded to personal

information held by public bodies. It will also position B.C. to lead Canadian

jurisdictions in e-government initiatives, reduce compliance costs and increase

openness.

I move that

Bill 13 be placed on the orders of the day for second reading at the next

sitting of the House after today.

Bill 13

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.

Statements

(Standing Order 25 b )

2010 OLYMPIC GAMES BENEFITS

TO BURNABY AND COQUITLAM

H. Bloy:

Yesterday I heard the member for East Kootenay speak about how people in his

corner of the province will meet to discuss how their region can benefit from

the 2010 Olympic Games. I also heard the member for Prince George–Mount Robson

tell the House that her constituents just launched their own Olympic initiative

to explore the potential opportunities in her area as a result of the Olympics.

Unlike

those places which lie hundreds of miles away from the site of the Olympic

venues, Simon Fraser University in my home riding of Burquitlam will host many

of the events at the 2010 Olympics if the bid is successful. Both communities in

my riding, Burnaby and Coquitlam, will see lasting benefits. People in Coquitlam

know this. Indeed, just last week I attended the launch of their very own

Olympic spirit team, which strongly endorses the Olympic bid.

[1415]

Right now

Burnaby is making a strong bid to host the 2009 World Police and Fire Games.

Along with the 2010 Olympic Games, our communities will see lasting benefits.

There are even more opportunities for Burnaby businesses and residents to

benefit from the games. I hope to explore with Burnaby council how we can

maximize the benefits for our city. Cities across B.C. are endorsing and

preparing to reap the rewards the Olympics will bring, and I want to make sure

Burnaby is no different.

CONTRIBUTIONS OF TEACHERS

AND SUPPORT STAFF

Brice: The parent advisory committee at Glanford Elementary School in my

riding has advised me that the Canadian Home and School Federation has

proclaimed a teacher and staff appreciation week in recognition of the valuable

role played by the teachers and support staff in our schools. The parents at

Glanford Elementary School, and I daresay the parents at all schools, recognize

the essential role that competent and professional educators play in ensuring

the full educational development of our children.

In the

education field, much time is spent in discussing curriculum development, grade

configuration, class size and grad requirements — all very important topics,

to be sure — but nothing comes close to the importance of the role played by

the relationship between a child and a teacher in ensuring a successful learning

experience. The magic that happens between the teacher and the student is really

what education is all about. We appreciate teachers for their dedication and the

endless patience they show towards our children, from kindergarten through to

grade 12.

The

Canadian Home and School proclamation also acknowledges the contribution made by

support staff. Everyone knows that if you really want to know what's going on in

a school, you ask the secretary or the custodian. I applaud the parents at

Glanford Elementary School in formally recognizing the teachers and all support

staff for their dedication and commitment to our children's well-being and

academic achievement.

SAFE SCHOOLS

Mayencourt: I spent the morning with some students in Saanich that were all

talking about creating safe schools. We've spent a lot of time, energy and money

in creating an excellent educational opportunity for students in this province,

but some students don't get the full benefit of these opportunities because they

feel unsafe in their schools due to harassment and bullying. There's no question

that students subjected to harassing and bullying behaviours can be hurt.

Behaviours that are often based on perceived differences of race, disability,

gender, sexual orientation and others

[ Page 5061 ]

can have a profound negative effect on the student's psychological and

emotional health.

One young

person who was submitted to continued harassment through all of his high school

years was Azmi Jubran. Azmi was singled out for abuse and name-calling by fellow

students claiming he was a homosexual, even though he was not.

Bullying is

unacceptable in any form, whether it is based on real or perceived differences.

Students, parents, educators, police and community have a shared responsibility

in maintaining safe schools. We must continue to ensure that our schools are

safe places to learn for all students. We must continue to strive to find

effective ways to educate our young people about the devastating effect bullying

has on individuals in our society. Together, we can provide our students with a

safe environment to learn the skills they need so that they can be in the world

and succeed and bring prosperity back to our province.

Oral Questions

FAIR PHARMACARE PROGRAM AND

PACIFIC BLUE CROSS CONTRACT

MacPhail: It was announced in the paper today that the Minister of Health

Services is contracting out to Pacific Blue Cross. Can the Minister of Health

Services explain on what basis he contracted Pacific Blue Cross to register

British Columbians for his Pharmacare income-testing scheme?

Hon. C.

Hansen: The ministry went out with an expression of interest in November.

Based on the information that was submitted by various corporations to that

expression of interest, a further request for proposals was issued in January.

As a result of that review, the contract was awarded to Pacific Blue Cross.

Mr.

Speaker: The Leader of the Opposition has a supplementary question.

[1420]

MacPhail: Well, the minister has his dates wrong. We have a leaked document

here. The opposition has learned through a confidential briefing note that cost

was not considered in the contracting out. The contracting-out option was

recommended not because of any cost savings, not because of any value to the

taxpayer, but because — quoting from the document: "With current B.C.

government downsizing activities underway, contracting out provides the best

optics." Why did the government choose to contract out the handling of

private and personal information to a private supplier based on optics?

Hon. C.

Hansen: The whole registration process is one that we have to get largely

completed by May 1. We want to make sure that not one British Columbian who is

eligible for benefits under the Fair Pharmacare program goes without those

benefits as a result of the registration process. To ensure that we had the

appropriate capacity, we went to an organization that has a proven track record

of dealing with this kind of call management. Also, this whole procedure has

been vetted through the privacy commissioner and has met with his satisfaction.

Mr.

Speaker: Leader of the Opposition has a further supplementary.

MacPhail: Well, there are about three things that the minister has wrong in

all of that. He's got his dates wrong, he's got his information wrong about when

the fix was in for Pacific Blue Cross, and he's got his information wrong on the

information and privacy commissioner. Not only was cost consideration not taken

into account in this confidential briefing note, but it specifically says

contracting out "will not significantly exceed keeping those functions

in-house." In fact, the document shows it could easily be done in-house.

The

briefing note goes on to explain that the advantage of contracting out private

information to a private company is that it is "politically correct to

do." I know this government never misses an opportunity to trump common

sense with ideology, but can the minister explain why, in his own document's

words, political correctness is considered a sound basis upon which to contract

out services that could just as easily be done in-house?

Hon. C.

Hansen: First of all, I should say I'm not familiar with the document the

member has. It was not a document that was prepared for me, and it was obviously

internal within the ministry. The contract that we have set up with Blue Cross

ensures that patient information is accurate and is protected and that all of

the privacy concerns are addressed.

J. Kwan:

In the news report today, the information and privacy office said that it was

not consulted about the new income-testing scheme. They said they're not

concerned, though, with just a matter of providing one line of a tax return. The

request for qualifications the Liberals had put out in December shows that it's

a lot more than that. It says that the Pacific Blue Cross will have access to

ministry computer systems which contain detailed and private information.

Can the

minister please explain why he didn't ask the privacy commissioner's opinion

about a contract that grants a private company access to personal information?

Did he just forget, or was he worried that it might scuttle his plans to do what

was politically correct?

Hon. C.

Hansen: Certainly, Pacific Blue Cross is an excellent British

Columbia–based corporation. In fact, just an interesting note for members,

it's actually a not-for-profit corporation based in British Columbia. They

handle confidential information on a regular basis. That is exactly what they

do. They handle claims that come in as a…

Interjections.

[ Page 5062 ]

Mr.

Speaker: Order, please.

Hon. C.

Hansen: …third-party insurer from employees and employers…

Interjections.

Mr.

Speaker: Order, please.

Hon. C.

Hansen: …across this province. As the member well knows, they have handled

those members' third-party insurance claims for the entire time that they have

been members of this Legislative Assembly. I have full confidence in that

organization to, first of all, provide a first-class service for British

Columbians who need to register for the Fair Pharmacare program. Secondly, I

have full confidence that they will fulfil their privacy obligations that are

set out in their contract.

Mr.

Speaker: The member for Vancouver–Mount Pleasant has a supplementary

question.

[1425]

J. Kwan:

What's clear is that the Liberals' decision to contract out the handling of

personal and private information had little to do with good public policy. It

had little to do with protecting the privacy of British Columbians, and it had

everything to do with optics and ideology.

In fact, in

the leaked briefing note from the ministry, it allows the qualified suppliers

access to the ministry system to complete transactions, capture data from forms

using ministry systems, validation of data from ministry databases and, as well,

the ability to connect to ministry systems, including mainframe and

Internet/intranet-based systems. The ministry will provide authentication

certificates for any workstations requiring access to systems.

Based on

this information, will the minister immediately ask B.C.'s information and

privacy commissioner to investigate the contract to ensure that British

Columbians' rights to privacy are not compromised by his new income-testing

scheme?

Hon. C.

Hansen: I actually gave the member that very reassurance a moment ago. The

contractual arrangement with Pacific Blue Cross is set up in a way that protects

that private information. I would also like to point out to the members that

they would have received, for their own personal third-party insurance, a little

card from Pacific Blue Cross setting out their benefits under third-party

insurance, and I have full confidence that…

Interjections.

Mr.

Speaker: Order, please.

Hon. C.

Hansen: …the members' information has been protected by Pacific Blue Cross

for these many years they have been members of this Legislative Assembly.

Interjections.

Mr.

Speaker: Order, please. Order, hon. members. Let's have some order in the

House so we can hear the question, please.

FACILITIES AND SERVICES

FOR SENIORS IN CRESTON

Suffredine: I'll try to get over this noise.

One of the

great heartland communities in my riding is Creston. Seniors facilities, such as

Pioneer Villa in Creston, have announced that they're going to be closing, and

many seniors in my riding are very uncertain about their future. That

uncertainty is causing many of those seniors a great deal of stress. Can the

Minister of State for Intermediate, Long Term and Home Care tell these seniors

if there is going to be a place for them?

Hon. K.

Whittred: The interior health authority is working very closely with

families in Creston to ensure that, in fact, this heartland community does have

the same range of services that are available to people in the larger urban

centres. We're working to be sure that there is a continuum that includes home

care, independent living, assisted living and bathing programs, as well as

nursing home care.

To this end

the interior health authority has created a made-in-Creston solution. They're

planning a community development process that will bring community groups

together to discuss the redevelopment of Pioneer Villa and how it can best meet

the needs of the community.

Interjections.

Mr.

Speaker: Order, please.

FUNDING FORMULA FOR POLICING

SERVICES IN SMALL COMMUNITIES

Bennett: My question is to the Solicitor General. Successive Union of B.C.

Municipalities AGMs have asked provincial governments over the years to address

the inequities in the funding formula used to fund policing services,

particularly as that relates to communities of less than 5,000 and

unincorporated rural areas.

For the

benefit of those smaller B.C. communities that have concerns about their ability

to pay, can the minister please provide some assurance to these small heartland

communities that the government will be fair to them in any new plan to deal

with policing services?

[1430]

Hon. R.

Coleman: We did have a consultation process last year at UBCM, which is now

continuing. I have recently written all of the small communities and unorgan-

[ Page 5063 ]

ized areas that would be affected by a new policing formula, advising them we

will not be implementing a new formula in this fiscal year. We're going out for

further consultation, because we think we want to find a formula that is fair,

that is progressive and that is sustainable and can also fall within whatever

grant programs other ministries may have relative to transition.

In addition

to that, we want to consult with them on how we can make this work for their

regions. Having said that, however, we will not be slowing down any of our

regionalization or integration of policing or our long-term strategy for

policing in British Columbia as we work through that formula, because that is

the number one priority of the ministry.

APPRENTICESHIP AND

SKILLS TRAINING MODEL

Lekstrom: My question is to the Minister of Advanced Education. I've heard

from a number of my constituents that they're worried about the forthcoming

changes to the apprenticeship model and feel that they will result in fewer

highly skilled tradespeople in our province. People are afraid that apprentices

will no longer be able to obtain their Red Seal certificate. Can the Minister of

Advanced Education at this time tell us whether apprentices will still be able

to become interprovincially certified?

Hon. S.

Bond: First of all, our goal in looking at the current apprenticeship and

skills training in the province is to actually increase the number of skilled

workers that we have in the province. That's absolutely imperative as we look at

the needs that are developing both here and across the country. As the new model

evolves, obviously of prime importance to us is that both provincial and

national certification will be maintained, so — absolutely — the opportunity

to achieve a Red Seal in this province will be maintained.

HUNTINGTON BORDER CROSSING

Penner: My question is to the Minister of Transportation. Border crossings

are an essential part of our transportation and economic infrastructure. It's

vital that we have safe, secure yet efficient borders to maintain our economy

and to open up B.C. Truck volumes at the Huntington border crossing in the

eastern Fraser Valley have doubled since 1993 and are expected to keep growing

by 5 percent per year. I personally have been stuck in the huge lineup of trucks

and vehicles trying to get across the border along Highway 11, and sometimes

that traffic is backed up as far as Vye Road. This causes traffic and safety

problems and is bad for our economy. Can the Minister of Transportation tell the

truckers and other residents of the Fraser Valley that the Huntington border

crossing will be improved in the near future?

Hon. J.

Reid: Border crossings are absolutely essential to our economy. We have

already announced $30.4 million worth of border crossing improvements, working

in partnership with the federal government. We anticipate, working with them,

that there will be more to come on this particular crossing, the Huntington

crossing, starting this summer. The ministry plans to complete the work on a

34-stall parking lot to relieve that congestion. Truckers who are coming there

have to complete their paperwork. They've been clogging the border. This is a

practical solution, a cost-effective solution, that's going to relieve some of

that congestion.

PROGRAMS AND SERVICES

FOR ABORIGINAL YOUTH

Krueger: The recent Speech from the Throne outlined the government's resolve

to establish a new relationship with B.C.'s first nations. There is a real

desire in the many aboriginal communities in my constituency to play an active

role in working with all levels of government to provide their young people with

the skills they need to reach their full potentials. To the Minister of

Community, Aboriginal and Women's Services: what is the ministry doing to help

aboriginal youth in British Columbia?

Hon. G.

Abbott: We are working in a number of ways as a government to try to build

stronger relationships with aboriginal leaders, with aboriginal communities and

indeed with aboriginal youth. As the member knows, last October we held the

inaugural first citizens forum which looked at a number of issues that were of

particular concern to youth — educational issues, economic development issues,

health issues and so on. Among the specific initiatives that we've undertaken

— and there are actually many — a couple, I think, might be of particular

interest to the member. Doubling the First Citizens Fund will allow us to

provide more student bursaries and larger student bursaries to aboriginal

students in this province.

[1435]

As well, we

have undertaken a new program, which we call Aboriginal Youth FIRST. It's being

piloted in the northwest of British Columbia. It looks at things like aquatics,

back-country guiding, tourism development, recreational and sports programming

in aboriginal communities. We believe this will be a way of building a love of

sport and, indeed, building some new economic development opportunities for

young people in aboriginal communities.

In those

and a number of other ways, we are building that strong relationship with young

aboriginals in this province.

[End

of question period.]

Orders of the Day

Hon.

G. Collins: I call Committee of the Whole House for consideration of Bill

[ Page 5064 ]

Committee of the Whole House

ENERGY AND MINES STATUTES

AMENDMENT ACT, 2003

The House

in committee on Bill 10; J. Weisbeck in the chair.

The

committee met at 2:38 p.m.

On

section

MacPhail: This is the

section that gives the authority to the government to

designate an agreement. It then goes on to talk about that designating an

agreement as it considers it relates to the provision of support services….

The

Chair: Member, excuse me. That should be

section 2, I believe.

MacPhail: Sorry. My apologies.

Section 1

approved.

On

section

MacPhail: Just to continue my remarks about the Hydro and Power Authority

Act,

section 2. This is the

section that allows the government to designate —

an interesting term — any agreement to be entered into by the authority that

the Lieutenant-Governor-in-Council considers relates to the provision of support

services to or on behalf of the authority.

What does

"designate" mean? Let's ask the minister that.

[1440]

Hon. R.

Neufeld: "Designate" means that cabinet will, by OIC, designate

the services that could be outsourced.

MacPhail: Outsourced. What does "outsourced" mean?

Hon. R.

Neufeld: It means the same today as it did in 2000, when you were going to

do it. It actually means that the Crown, B.C. Hydro, is able to get its services

from places other than in-house. So if they need to buy power poles, they can

actually go out and buy power poles, or they can buy services from some other

company that they require to carry out their duty as B.C. Hydro.

MacPhail: It was very good that the minister tabled those documents

yesterday so the public will actually be able to see that in no way what the

previous government contemplated doing, and then didn't do, was outsourcing. It

was the creation of a subsidiary inside B.C. Hydro, publicly owned, wholly

owned. The minister — just the same way that he was incorrectly briefed on

what letter Mark Veerkamp wrote — misrepresented exactly what the previous

government thought about doing and didn't do. It is in no way — in no way —

similar to what this government is doing, which is outsourcing.

Let me ask

the minister this — and maybe he'd better actually read the memorandum of

understanding he has with Accenture: what's the difference between outsourcing

and privatizing?

Hon. R.

Neufeld: The issue, as I recall, that I tabled yesterday demonstrated that

the previous government was moving towards creating two companies in conjunction

with B.C. Gas, which is a private company, which would be 50 percent owned by

the province, or B.C. Hydro, and 50 percent owned by a private company called

B.C. Gas. She should maybe read…. Outsourcing is giving the ability to B.C.

Hydro — in this case, what we're talking about — to go out and get services

in the market at the best possible price they can and still provide the same

level or better services for the corporation and for the people that own B.C.

Hydro, which is the province of B.C.

MacPhail: The reason why this is important is because the minister has

repeatedly said he's not privatizing B.C. Hydro. He didn't distinguish on any

basis, and in fact, he upped his own ante yesterday when he said he would resign

if B.C. Hydro were ever privatized. Could the minister provide a definition of

privatization that makes it different from outsourcing?

Hon. R.

Neufeld: Again, selective hearing. What I said was that I wouldn't be here

if the government of the day relinquished its promise that we would not sell or

privatize the core assets of B.C. Hydro: transmission, distribution, generation

— all of those. That was very clear, and I guess….

MacPhail: Actually, that's not what you said.

Hon. R.

Neufeld: It's not what I said? I know what I said, but thank you for telling

me what I said. I really appreciate that.

MacPhail: Yes, the minister has every right to laugh nervously, because he

said that he would resign if B.C. Hydro is privatized — full stop. He'd better

be nervous, laughing. Could the minister provide a definition of

"privatization," please? Could he provide a definition that

distinguishes privatization, in any way, from outsourcing? And I might ask the

minister to keep in mind what the memorandum of understanding is with Accenture.

He'd better take a moment to read that memorandum of understanding, because his

career's on the line.

[1445]

Hon. R.

Neufeld: What this act does is allow B.C. Hydro — in fact, it puts it in

the legislation — with the

[ Page 5065 ]

approval of cabinet, to outsource some of its services. It lists them in

section 2, which — and I read verbatim: "…does not include the

production, generation, storage, transmission, sale, delivery or provision of

electricity."

MacPhail: I can understand why the minister is obfuscating, because he might

have to deliver on his promise.

Let me read

this, then, out of the memorandum of understanding between Accenture and the

government. "B.C. Hydro and the B.C. subsidiary of Accenture will initially

be involved in the new joint venture. After a transition period, B.C. Hydro will

relinquish its minority position in the joint business. The new business will be

privately owned and operate in the private sector. It will be a wholly owned

subsidiary of Accenture."

Is that

privatization?

Hon. R.

Neufeld: It describes the company that B.C. Hydro is going to outsource

those services from. The member just described it. It is a private company, yes.

MacPhail: How does this sound? I actually did go to the dictionary, like all

the Liberal backbenchers were yelling out there. It's the Merriam-Webster

dictionary, and it's the dictionary of law, so it's actually the legal

definition. Here's what "privatized" says. It's a verb: "Change

industry or business from governmental to private control or ownership." Is

this privatization?

Hon. R.

Neufeld: This is a move that allows B.C. Hydro to purchase its services from

an outside source, services that it deems it can receive cheaper by doing that

than the way it is done today.

MacPhail: Mr. Chair, he's not answering the question. I'll keep asking it

until the minister answers it. I have just read a definition of privatize. I

have read what the minister's memorandum of understanding describes in terms of

this transaction of B.C. Hydro giving away the operations to Accenture. Is it

privatization according to this legal definition, or can the minister table

another definition that says it's not privatization?

Hon. R.

Neufeld: Bill 10,

section 2, which we're on, deals with B.C. Hydro and Power

Authority and its ability, under approval by cabinet, to actually purchase

services from an outside source. That's all this act allows. That's what we're

discussing today. The reason to do this is to actually save money and provide

the same level of service or better service in the future. It will actually

benefit the ratepayers of British Columbia Hydro well into the future. It's a

ten-year contract with Accenture to provide those services to B.C. Hydro, and I

think it's a good deal.

MacPhail: Let me try a different definition. How about this definition of

privatization?

"Privatization

occurs where a department discontinues both responsibility for, and delivery of,

an operation such that simultaneously and by prior agreement with the department

a private sector organization assumes delivery of that operation. Where an

operation is transferred under these circumstances, the operation is deemed, for

the purpose of this directive, to be discontinued, resulting in a workforce

adjustment situation."

Does that

sound like anything the minister is doing?

[1450]

Hon. R.

Neufeld:

Section 2 of the act demonstrates and lists the services that can

be outsourced by authority from the cabinet for B.C. Hydro to obtain those

services from other sources rather than in-house. That's exactly what this piece

of legislation deals with.

MacPhail: I think it's going to be pretty clear that as this minister stands

up and talks more and more and more, he's deliberately refusing to answer the

question, because he upped his own ante. He got smart. He got cute and said he'd

resign if B.C. Hydro were privatized. That's exactly what he said.

Let me read

what the minister said: "If B.C. Hydro were privatized by some other

government, I can't do anything about that. But by our government, I'm

gone." That's what he said. He didn't qualify it at all.

Now the

minister is trying to stand up and say it's outsourcing. He can't tell me how

I'm wrong on the privatization. Two

definitions so far describe exactly what

this government is doing, to a T, and the definition of what this government is

doing — mind you, these are only legal

definitions — is

"privatize."

I'll go

back to my question that the minister didn't answer. What's the difference

between outsourcing and privatizing?

Hon. R.

Neufeld: I will answer the question one more time. This bill lists out what

support services are and how B.C. Hydro can move towards purchasing those

support services by the authority of cabinet. They can purchase those services

from other sources rather than providing those services internally if, in fact,

it is deemed by B.C. Hydro and the cabinet that there is a substantial saving to

the ratepayers of the province and that the services will be the same level or

better.

MacPhail: Could the minister answer my question? I heard what the minister

said. Could the minister now say what he's been repeating over and over and over

again — how that's different than privatization?

Hon. R.

Neufeld: I've explained this, I think — what? — six times now.

MacPhail: No, you haven't, actually.

Hon. R.

Neufeld: I have.

MacPhail: No, you haven't. Worried, nervous?

[ Page 5066 ]

Hon. R.

Neufeld: No, I'm not worried and I'm not nervous. We're doing exactly as we

said we would during the election. We're moving forward this bill that we're

dealing with today. This

section of it is to deal with how B.C. Hydro can

procure services and what services they can outsource or buy from other people

in the marketplace. It's all about saving money for the ratepayers. It's all

about doing business in a better way. There's nothing wrong with that, and I

think we should look at it in a positive light.

The

Chair: The Leader of the Opposition.

MacPhail: One second. I just need to confer with my….

The

Chair: Yes.

MacPhail: Thanks.

Jarvis:

Section 2 of this bill here. Questions keep coming, asking him about

privatization and if it is privatization or not. The minister gets up and gives

a very good explanation of what the intent of this bill is, and all we're having

is a repetition, on and on and on. Mr. Chair, I was wondering if you could

either direct the questions to this section, as the minister is discussing, or

get on to another section.

[1455]

MacPhail: Thank you, Mr. Chair, for allowing me to confer with my colleague.

These are

actually the kind of questions that the member for North Vancouver–Seymour

should be asking himself. He was certainly a very harsh and direct critic of

B.C. Hydro in the past, and somehow, if the minister has private

communication…. Can talk through some sort of other method to the minister…?

Maybe he's getting the answer.

But I have

yet to hear from the Minister of Energy what his definition of privatization is.

Let's take it away from any of the discussion we're having right now. The

minister yesterday made a commitment that he would resign if B.C. Hydro were

privatized. What did he mean by that? What is his definition of privatization?

Interjection.

Hon. R.

Neufeld: It is. It's actually quite a great document. You should read it.

Again, what

I've said this bill deals with — and I'm trying to deal with this in a very

good fashion…. This bill demonstrates and lays out very clearly to British

Columbians what can be outsourced and what can't be. That's what the bill is all

about.

MacPhail: The only reason why the minister's staff sent in the New Era

document is because that document says the government won't privatize the core

assets of B.C. Hydro. But what we're discussing here is whether this particular

portion, where they've given a contract to Accenture, is privatization. That's

all. The minister won't answer that question. What is the minister's definition

of privatization? Not what the New Era document does, because that

document doesn't define privatization. It says what you won't privatize. When

the minister made that grand promise yesterday that he would resign if B.C.

Hydro were privatized, what definition of privatization did he have in his mind?

Hon. R.

Neufeld: Let's see. When I look through this bill, I read nothing about

resigning in here. I read nothing on any one of the sections that has anything

to do with that. I read nothing on any one of the sections that has anything to

do with the newspaper. But I do read sections of this bill that demonstrate and

are very clear and transparent with British Columbians on how B.C. Hydro will,

in the future, receive its non-core services and its support services. I think

it's open, it's transparent, and it lays it out very clearly.

MacPhail: Is there some reason why the minister doesn't want to call this

privatization? Is there some reason for that?

Hon. R.

Neufeld: Again, I'm going to go back to the bill that's in front of us.

That's the bill we should be discussing. Whatever

section we're discussing right

now, we should be talking about that. This bill lays out very clearly and

demonstrates very clearly to the people of the province about support services

as related to B.C. Hydro and core services as related to B.C. Hydro.

MacPhail: I'm asserting that this is privatization. Am I wrong?

The

Chair: Shall

section 2 pass? Leader of the Opposition.

MacPhail: Sorry. This is privatization. Am I wrong?

Hon. R.

Neufeld: Again, I'll try to explain it. It says it very clearly. I wish some

would read it. It describes very clearly in the bill what are support services

that B.C. Hydro can outsource only after receiving the authority from cabinet

and demonstrating that those support services can be obtained for the Crown —

services that they need — at a cost saving, and also to be able to provide the

same level of service or better service.

[1500]

MacPhail: He's not only skating on thin ice; he's fallen through the ice

hole on this one. This is privatization, and the minister's silly commitment

yesterday to resign if B.C. Hydro is privatized is exactly why he refuses to

announce today that this is privatization — exactly. The minister….

Interjections.

[ Page 5067 ]

The Chair: Order,

members. Order, please.

Interjections.

The

Chair: Order, members. Order, please.

MacPhail: Methinks the Attorney General's ego is getting out of control. I

couldn't dare gaze upon him. His wit is so scintillating, it's unbelievable.

An Hon.

Member: It's not hard, compared to yours.

The

Chair: Members, let's keep the debate between the minister and the Leader of

the Opposition at this point.

MacPhail: I would be happy to do that, Mr. Chair.

The

Chair: On the bill, on

section 2, please.

MacPhail: Although the colleagues in that brain trust of the front bench

think that it's not important at all whether this be called privatization or

not…. Again, they try to say that this is not the slippery slope of

privatization. They use fancy words that they think the public won't understand,

like outsourcing. The minister refuses to provide his own definition that

distinguishes outsourcing from privatization, but every single legal application

of this designation is that they're privatizing one-third of B.C. Hydro. In

fact, the memorandum of understanding that this minister has signed with

Accenture says exactly that — that this is privatization.

The reason

why this is so important is because you then go on to define what this

government thinks is part of support services. Perhaps the minister could tell

us how the definition of support services came about.

Hon. R.

Neufeld: Actually, it's described in (10):

"For

the purposes of subsection (9), 'support services' means the services that

support or are ancillary to the activities of the authority from time to time,

and includes services related to metering for, billing and collecting fees,

charges, tariffs, rates, and other compensation for electricity sold,

delivered or provided by the authority, but does not include the production,

generation, storage, transmission, sale, delivery or provision of

electricity."

J. MacPhail:

Does this definition of support services capture everything that this government

is turning over to Accenture?

Hon. R.

Neufeld: The Accenture deal is separate from what this bill is, but this

describes the services that could be outsourced. If there are some services that

B.C. Hydro could actually procure under those descriptions, they would have to

come to cabinet and say, as they have with the other ones: "Can this

happen?"

I'm not

sure, but I'm sure if you had asked Hydro, they may have some other services

that they may wish to outsource.

MacPhail: I've not had an opportunity to ask Hydro. It's up to the minister

to answer these questions.

I take it

that this bill goes beyond support services and captures services beyond the

Accenture deal. Am I correct?

Hon. R.

Neufeld: She's wrong. It describes the type of services — I read them into

the record — that Hydro can look at procuring outside the corporation only

with the approval of cabinet.

[1505]

MacPhail: I fully accept the answer. I'm not sure how that makes me wrong.

So we have the Accenture deal which privatizes a range of services. The minister

is saying that there can be more that can be "outsourced" than the

Accenture deal. Is the minister then suggesting — call me wrong; say I'm wrong

— that everything can be privatized except for production, generation,

storage, transmission, sale and delivery? Everything else can be privatized?

Hon. R.

Neufeld: The legislation allows other services that Hydro receives to be

purchased from other sources. I'll give the member one example. Fleet services

could be. I'm not sure. B.C. Hydro….

Interjections.

Hon. R.

Neufeld: Well, no. All right. That could happen if, in fact, they make a

case that they could provide those services cheaper by purchasing them in the

market. That's just one example that I can think of off the top of my head.

MacPhail: Last April, Hydro announced that they were privatizing Westech

Information Systems and the vehicle services. That's already been announced.

That's not a breakthrough by any stretch of the imagination. What I'm trying to

get at here is that the minister refuses to acknowledge that this is

privatization, and there's a very good reason for that. It's because his

career's on the line, and of course, the whole reputation of the Liberal

government is on the line here. Just the same way they said that they're not

going to privatize B.C. Rail and campaigned on that. Then it turns out that but

for the rail ties, they're privatizing absolutely everything. So I'm trying to

figure out what the limits are of this minister and his privatization exercise,

because right here, in the support services listed, it says that support

services means services that support or are ancillary to the activities of the

authority from time to time.

The

Accenture deal deals with the privatization of human resources. That doesn't

meet this definition. It doesn't meet the definition at all. Those services are

not

[ Page 5068 ]

needed from time to time. Financial services — that's being privatized.

That doesn't meet the definition under here. Those are continuous services. This

definitely says services that are ancillary to the authority from time to time.

Now, the….

Interjection.

MacPhail: Mr. Chair, I'd be happy for the Government House Leader to stand

up and answer the questions in place of the minister. I'd be happy to have him

do that. I'd be absolutely happy to have him do that.

Interjection.

The

Chair: Order, please. Let's have the questions directed to the Chair,

please.

MacPhail: Oh God, the Government House Leader must be a popular guy inside

caucus. He must be just an absolutely popular guy.

Interjections.

MacPhail: Yeah. I hear all the rumours, believe you me.

Well, what

are those services, then? What do those words mean to the minister responsible

or the Government House Leader? Have him feel free to get up and answer it —

or the AG. He's got a lot to say too.

[1510]

Hon. R.

Neufeld: Just for the record, fleet services was withdrawn. I used that as

an example that they may be able to. Obviously, when they started dealing with

fleet services, maybe they found that it was done better in-house than actually

outsourcing that service. That's just a point the member might want to write

down. But it does say in subsection (10) that it means the services that support

or are ancillary. So that's the definition: either supports or are ancillary.

MacPhail: I hate to actually correct the Government House Leader, but here's

how you read the language. Support services could mean services that support the

activities of the authority from time to time, or it could mean services that

are ancillary to the activities of the authority from time to time. That is

exactly the legal definition ? exactly. They either support from time to time or

are ancillary from time to time. That is exactly what the language means. If

there's a legislative drafter over there, that is exactly what the language

means.

The

minister just received bad advice from the Government House Leader in his

usually arrogant way. The Government House Leader thinks he knows everything,

and he completely misled the minister. So it means one of two things. It means

services that support the activities of the authority from time to time or are

ancillary to the activities of the authority from time to time. That's exactly

what it means. In either case — either "support" or "are

ancillary" — it's qualified by the words "from time to time."

What does that mean?

Jarvis: Your

interpretation is wrong.

MacPhail: I've drafted legislation for ten years; I know what it means.

Hon. R.

Neufeld: This bill is, I think, very clear. I guess, from the member's

words, she knows the legal ramifications of it. That's her opinion. She's quite

welcome to have that opinion.

MacPhail: Opinion?

Hon. R.

Neufeld: Yeah, she's quite welcome to have that opinion. It reads very

clearly what support services are and what they are not. For B.C. Hydro to

actually have the ability to do anything more than what they're doing now, they

would have to come to cabinet and demonstrate to Treasury Board, or cabinet

through Treasury Board, that there would actually be some savings and that the

level of service could be maintained or improved.

MacPhail: What are support services that are needed for the activities of

the authority from time to time? It's not an opinion. This minister, just

because he doesn't know what he's talking about, cannot accuse me of not knowing

what I'm talking about. I know exactly what I'm talking about here ? exactly.

These words have to have meaning. Legislative drafters do not put words in the

legislation unless they have meaning. What is the meaning of the term "from

time to time"?

Hon. R.

Neufeld: "From time to time" could mean services that are required

from time to time if projects are happening or being built around the province.

Maybe the corporation needs to purchase those services. That could be from time

to time.

MacPhail: What services that are part of the Accenture deal are not needed

from time to time but are needed continuously? This is legal language that gives

support to the Accenture memorandum of understanding. It is the basis upon which

this government has the right to privatize one-third of B.C. Hydro. The legal

definition is extremely important, and it doesn't make sense.

[1515]

Hon. R.

Neufeld: I'm sorry I didn't hear the whole question, but there have only

been about two questions since we started just shortly after question period.

Maybe to help the discussions, I could read into the record the services that

are going to be provided to B.C. Hydro by Accenture: customer services, Westech,

network computing services, disbursement services, financial systems, HR

services, building office services, purchasing department, financial and

business support services.

[ Page 5069 ]

MacPhail: Thank you for that information. It's irrelevant to the question I

just asked.

This will

be my last question for a moment, and I'll turn it over to the member for Prince

George–Omineca after this question.

Again, I

preface this….

Section 12(10) is the legal raison d'être for this government

privatizing a third of B.C. Hydro. It is the legal basis upon which Accenture

gets to do the job as a private company. It is the only basis on which this

government can privatize those services, so every word has a meaning. I asked

the minister. He can't tell me what "from time to time" means. He

can't. The list of services he just read into the record has nothing to do with

being offered from time to time. They are integral — completely integrated —

services that are offered every minute, every hour, every day to every customer

of B.C. Hydro. What are those words "from time to time" in this

legislation for?

Hon. R.

Neufeld: I'll relate again. "Time to time" could refer to projects

that are done in different places around the province that aren't continuing

operations, but from time to time B.C. Hydro requires services to perform those

duties. That, I think, is a pretty good description of what "time to

time" is.

Nettleton: This is an interesting exercise. I have no interest in

embarrassing the minister, nor do I personally have any interest in seeing him

being forced to resign. Nevertheless, I can tell you this. Frankly, I'm a lot

more concerned with respect to consumers, be they corporate, industrial or

residential. Nothing I've heard here today gives me any comfort that, in fact,

this government and particularly this minister have any sense as to where this

government is going in and around B.C. Hydro.

The Leader

of the Opposition had simply asked, and I was going to do the same thing, for a

definition of privatization — pretty basic, pretty fundamental to this whole

discussion. We didn't get a simple definition of privatization. It's my sense

that the minister really doesn't understand the whole notion of privatization.

Again, in

response to a simple question from the Leader of the Opposition, he couldn't

define "designation" prior to a discussion in and around

privatization. I expect that he may have some difficulty, as well, with a

discussion in and around deregulation, another term that's been tossed around by

this minister and by this government.

I haven't

heard anything here today that gives me any sense of assurance that this

minister has a handle on this ministry, specifically….

The

Chair: Member, could I just caution you here. This is committee stage of the

bill. We're to deal with

section 2 of Bill 10. This is not second reading

debate. Rather, there should be a question in all of this, please.

Nettleton: Absolutely. You're right. There is a question. There are a number

of questions. One of my concerns is we haven't had answers to the questions that

have been raised to date in and around the whole question of privatization,

regulation and so forth.

[1520]

I think one

of the problems is that we had an Energy Policy Task Force report that was kept

under wraps for seven months. It was released in January, short on detail. We've

had an Accenture deal. There's been some discussion within the context of Bill

10 here today and in second reading debate on that contract, the Accenture deal,

worked out in secrecy. Now we have Bill 10 before us, which doesn't go into the

kind of detail that we need in order to understand what B.C. Hydro will look

like as three components.

I called in

second reading debate for dialogue and consultation with respect to the whole

question of B.C. Hydro and its future. Again, I think the minister has talked

about privatization, and I would like the minister to provide this House, to

provide consumers that depend on this minister and look to B.C. Hydro, with a

definition of privatization. Can the minister provide us with a simple

definition that people who are listening out there can understand? Define for

them, if you will, privatization.

Hon. R.

Neufeld: The energy policy that we delivered, although this isn't dealing

with the energy policy…. I'll try to be as close to the bill as I can. The

energy policy that we delivered November 25, 2002, had a

section in it that

stated clearly that we would look towards B.C. Hydro being able to outsource

support services where costs can be reduced for electricity consumers while

maintaining quality of services. That's been out there since November 25, 2002.

What Bill

10 does, again through the Chair, is actually put it in fairly good writing so

that people can understand the difference between support services and what does

not constitute support services. I suggest the member read it.

Nettleton: I guess I'll reluctantly accept that, in fact, either the

minister is unable to answer that question — a pretty basic or pretty

fundamental question — or he's unwilling. In either case, it's totally

unacceptable that he cannot define privatization.

There have

been people who have suggested to me that the minister is not the sharpest knife

in the drawer, but I stood up for him. "The way he's carved up B.C.

Hydro…." I've said: "Absolutely, this guy is sharp."

The

Chair: Member, I find that sort of comment inappropriate for this House.

It's entirely unparliamentary.

Nettleton: That's fine. I withdraw.

The

Chair: I would ask for an apology, please.

Nettleton: I withdraw. I do have a question, though, for the minister. Why

Accenture? Why is the minister, why is the government, turning to Accenture for

a contract?

[ Page 5070 ]

Hon. R.

Neufeld: This bill actually is not…. We're not discussing the Accenture

deal. In fact, probably fairly soon you will be able to see the Accenture deal

in its entirety, and you can make your own decision. This bill deals with what

is defined as support services, what are core services to B.C. Hydro, and the

ability for B.C. Hydro to outsource.

MacPhail: Sorry. We're not talking about the Accenture deal? Is the minister

suggesting that there's some reason for this legislation other than the

Accenture deal?

Hon. R.

Neufeld: The member knows full well that this bill is to allow those kinds

of agreements to take place in an open and transparent way. That's what the

bill's about.

MacPhail: Well, so far the only kind of situation we have before us is the

Accenture deal. I think it's absolutely appropriate that this Legislature

discuss the Accenture deal because after the government rams this legislation

through with its majority, no one will be able to examine the Accenture deal —

no one.

Let me put

that to the minister: will the B.C. Utilities Commission be able to examine the

Accenture deal in any way after this legislation is passed?

[1525]

Hon. R.

Neufeld: Actually, that question has been asked many times. If you go down

to subsection (12), I'll read it into the record: "Nothing in subsection

(11) (

e) precludes the commission from considering the costs incurred, or to be

incurred, in relation to an agreement designated under subsection (9) when

establishing the revenue requirements and setting the rates of the

authority."

MacPhail: I've been in the House discussing this matter from the time we

started discussing this bill, and I've never asked that question. So I'm not

sure. Was it his own caucus that was grilling him on that point? Maybe it was,

but guess what. There are several members of the Legislature that aren't privy

to the private meetings of the Liberal caucus. The public isn't privy to the

private meetings of the Liberal caucus. Maybe the minister answered the

questions to — I don't know — the member from Chilliwack, but he hasn't

answered them in the House.

His answer

that he just gave doesn't deal with the question. The

section the minister just

quoted said that the Utilities Commission will be able to take into account the

costs incurred by the Accenture deal, not whether those costs are legitimate or

not. That's what the

section does. Is there any way the inputs of the Accenture

deal can be considered by the B.C. Utilities Commission?

Hon. R.

Neufeld: The member's wrong, actually. The B.C. Utilities Commission will

review all costs when B.C. Hydro makes its rate application this November. Let

me see. B.C. Hydro has not had to appear before the B.C. Utilities Commission, I

think, for about ten years. A previous government decided that B.C. Hydro

shouldn't have to do that. They will now appear before the B.C. Utilities

Commission to justify why they think they need any kind of a rate increase. In

that process the B.C. Utilities Commission will be able to review all costs. If

they think the costs are too high, if they think any costs that the utility has

incurred are out of line with other utilities that are too high, they can tell

B.C. Hydro they refuse to accept those and put them in the rate base. B.C. Hydro

will have to go away and figure out how they can do the job a little bit better.

The B.C. Utilities Commission will have that authority to review all those costs

when B.C. Hydro goes forward this fall.

MacPhail: That's great news, actually. That's absolutely wonderful news. I'm

just going to reiterate what the minister has just committed to. The Accenture

deal, in its entirety, will go before the B.C. Utilities Commission. The

Accenture deal will be able to be examined point by point by the B.C. Utilities

Commission. All of the factors of the Accenture deal will be examined to

determine whether the costs of the Accenture deal are legitimate costs when

determining rate increases. Am I correct?

Hon. R.

Neufeld: Again, selective hearing. That's not exactly what I said, so I'll

say it again. When B.C. Hydro appears before the B.C. Utilities Commission for a

rate hearing this fall, as they are going to make application to, the B.C.

Utilities Commission will review all of B.C. Hydro's costs — whether it's with

Accenture or with others — because for ten years the B.C. Utilities Commission

has not had an opportunity to review those costs.

[1530]

For the

first time in a decade, actual experts within the B.C. Utilities Commission will

review all the costs associated with B.C. Hydro as they review their rate

requirement or the rate increase that they're requesting. Through that, I assume

— and I believe it will happen — all costs that B.C. Hydro have will be

reviewed. The costs with Accenture will be reviewed by B.C. Hydro to make sure

that they are fair, equal and that they actually provide the services to B.C.

Hydro that they're destined to do.

MacPhail: One more question in this area because, clearly, the minister —

as I repeated exactly what he said — backed off. He backed off completely.

The

minister is relying on the Hydro Power and Authority Act with its new subsection

(12) of

section 12, which allows the costs of the Accenture deal to be

considered. But (11)(

e) says that the authority — meaning the Utilities

Commission — is not required to obtain any approval, authorization, permit or

order under the Utilities Commission Act in connection with the agreement, and

that's the agreement we're talking about.

Then it

goes on to say under subsection (12) that nothing in that

section that I just

read "precludes the

[ Page 5071 ]

commission from considering the costs incurred, or to be incurred, in

relation to an agreement designated…when establishing the revenue requirements

and setting the rates of the authority."

The great

unwashed public and people like my colleague and I thought that meant that the

agreement was shrouded in secrecy. The details of the agreement with Accenture

couldn't be considered in terms of its inputs, but the overall cost of that

agreement has to be taken into account when rates are established. In other

words, the public doesn't get any chance to discuss the way the Accenture deal

came about, but the overall cost can be added to hydro rates. But the minister

says: "I think I'm wrong on that." The minister is now saying….

Let me try

it a different way, then. Is the minister saying that the Accenture deal will be

examined in detail by the Utilities Commission and that if the costs are

inappropriate for justifying a hydro rate increase, the B.C. Utilities

Commission has a right to authorize that?

Hon. R.

Neufeld: As I said earlier, as B.C. Hydro goes before the B.C. Utilities

Commission with their rate request….

MacPhail: It's a straightforward question — yes or no?

Hon. R.

Neufeld: Yeah, it is, and I'm going to give you a straightforward answer —

again.

They will

have to provide to the B.C. Utilities Commission all the costs that go with

providing the electricity that they do to their customers domestically in

British Columbia. The commission will review all those costs, regardless of

where those costs are. It could be for some company that provides transformers

or power poles or anything. The B.C. Utilities Commission — that's their

oversight. That's something the last administration forgot about when they

removed B.C. Hydro from under the Utilities Commission auspices. Only if the

B.C. Utilities Commission decides that those costs are fair and are fair to be

passed on, can they be passed on. In fact, the B.C. Utilities Commission can say

no to some of those costs if they, in their wisdom, feel that they are not

warranted.

[1535]

Nettleton: I remain unconvinced, but in any case, I think the minister will

live to eat those words another day. But, yeah — informative.

I believe

B.C. Hydro itself called the Accenture deal the biggest deal of its kind in

B.C.'s history, as I recall. In light of this and Bill 10, which we're examining

here today, and the fact that outsourcing functions are removed from public

scrutiny, as I believe is the case, would the government — as has been

suggested by a political columnist — commit to a review of this deal by the

auditor general?

Hon. R.

Neufeld: I think I've explained quite a few times in the House now what the

bill does — what it allows and what it doesn't allow. We should move on and

start talking about the rest of this good bill.

Penner: I'd also like to take

part in this debate. I have a couple of

questions for the minister. The minister and other members of this House will

know that I have a great interest in B.C. Hydro, and have had for many years,

and have frequently spoken on the issue of B.C. Hydro not only in caucus but

here in the Legislature ever since I first became an MLA.

I do have a

number of questions, though, for the minister. Has B.C. Hydro or the B.C.

government previously done business with Accenture or its predecessor? If so,

can the minister give us some details about that and under which administration

that work may have taken place?

Hon. R.

Neufeld: Thank you very much for that question. The member for

Chilliwack-Kent has actually been very active in anything that relates to B.C.

Hydro. He's been very active in independent power producers across the province

of British Columbia, and in my ministry I respect his input and his knowledge on

those items. Yes, Accenture is not a stranger to B.C. Hydro. For the decade of

the nineties there was approximately, I would say, $50 million spent by B.C.

Hydro on Accenture.

Penner: It's fair to say, then, that that money — $50 million — from

B.C. Hydro was spent during the previous NDP administration. Is that correct?

Hon. R.

Neufeld: Yes.

Penner: I've noticed the minister's comments over the last day, where he

said that if the government were to break its promise not to protect in public

ownership the core assets of B.C. Hydro — including the dams, transmission and

distribution — he would have to reconsider his position in government. I

certainly salute that because, to me, our campaign commitment around B.C. Hydro

is very important. Just as important to me was a commitment I made locally

during my election campaign that we'd also improve B.C. Hydro so that we could

make sure that B.C. residents continued to receive enough electricity — in

other words, that we maintained adequate supplies.

I have

become concerned in the past that the last government did not invest in any

significant new generation in British Columbia. In fact, the only power plant of

significance built under the NDP was in Pakistan at a cost of about $10 million

to British Columbians — hardly helping our system reliability. I am aware that

we have to make changes, and I support….

Interjections.

The

Chair: I want to remind all members that we should restrict our questions

and our comments to this bill, please — to committee stage.

[ Page 5072 ]

Member,

would you proceed, and I hope there's a question in this.

Penner: Given that we need to make changes in B.C. Hydro, I wonder if we can

make sure that we protect our interests and, if certain changes don't work out,

that we can correct any problems that might arise. What I'm getting at here is

that I've heard critics or opponents of the proposed partnership with Accenture

state that if the benefits to B.C. Hydro do not accrue — if the project or the

partnership doesn't turn out the way it is intended — there is no way for B.C.

Hydro to get out of the partnership agreement and there is no way to correct the

problem. In part, I'm told this is because of various trade agreements. I wonder

if the minister can tell me if he or his staff have looked at this issue and

whether there is any protection for British Columbians, if the partnership

doesn't work out as planned for B.C. Hydro to get out of the arrangement.

[1540]

Hon. R.

Neufeld: Yes. People from my ministry have been involved. B.C. Hydro folks,

obviously, have been involved. The deputy minister responsible for energy

development has been involved. Other accounting agencies and legal firms have

been involved to make sure that the shareholder is kept whole and that there are

all the normal things that would be in a contract of this kind — meaning

benchmarks and performance targets. Actually, if they don't perform, there are

penalties. All of those kinds of things, I can assure the member, have been

reviewed consistently and will be in the contract.

Nettleton: I had asked the question: why Accenture? It wasn't intended to be

a rhetorical question, but I do have some thoughts with respect to Accenture and

why Accenture.

It may in

fact be, at least partially, because it's located in Bermuda, outside the scope

of court judgments. It's been reported as having numerous cost overruns in

different states and so on. Now, with Bill 10, it's being put outside of

government oversight. That may explain why the government is doing business with

Accenture. I'm concerned, as others are, about what safeguards will be in place

for British Columbians. Where will there be some accountability with respect to

the operation and administration of this Accenture corporation?

One other

question. I'd like to take a final run at this, if I may, with respect to the

whole question of privatization. The minister had indicated very publicly in the

press — unless, in fact, he's taken the position that he didn't say this….

As I understand it, he's said he will resign if the government privatizes B.C.

Hydro.

MacPhail: That's what he said.

Nettleton: That's what he said.

MacPhail: No qualification.

Nettleton: I'm just wondering….

The

Chair: Member, would you kindly be seated for a second. This line of

questioning that's being pursued about the minister's responsibility for his

comments — I'd like to know how that relates to this bill and to committee

stage, please. You asked a question initially. I would assume that you want that

answered.

Nettleton: My question is privatization, which I think is fundamental to a

discussion of Bill 10 — in particular, this section. Again to the minister:

what is it that will cause him to resign that he says is not in the plan for

B.C. Hydro?

Hon. R.

Neufeld: The comment I made was that I would not be here if we did not live

up to our commitment in the New Era document, which each and every member

who belongs to the B.C. Liberal caucus made. That was to protect the core assets

of B.C. Hydro, that being the dams, transmission and distribution — the core

assets. That was the commitment I made. That was the commitment the Premier took

forward to the people in the province of British Columbia during the election.

That's the commitment we've lived with. That's the commitment written in the

energy policy that was released November 25. It's very clearly laid out in the New

Era document.

B. Kerr:

I'm concerned about the governance here. Will this agreement be signed with

Accenture, or will it be signed with a British Columbia company, operating under

the laws of British Columbia, that may be owned by Accenture?

Hon. R.

Neufeld: The contract between B.C. Hydro and Accenture will be signed with

the British Columbia company with a head office in Vancouver, B.C. It will look

toward growing that business well into the future and has access to over $50

billion worth of services North America–wide. It can only mean good things and

lots of good jobs for the province.

Further to

that, this company will pay taxes in British Columbia: corporate taxes, personal

income taxes, all those taxes — and obviously, if they're in the city of

Vancouver, Vancouver taxes. Just to clarify that.

[1545]

MacPhail: Mr. Chair, I appreciate you keeping us on track. That's very

important.

The reason

why the issue is important — about privatization and the commitment that the

Liberal government made — is that this minister and his government are trying

to separate generation, distribution and transmission functions from support

services. Somehow, even though the minister has danced around it and spent a

half-hour not saying that what they're currently doing with the Accenture deal

is privatization, it is privatization.

It has

occurred, I think, to several people — if not hundreds of thousands of British

Columbians — that

[ Page 5073 ]

the separation of support services from the generation, distribution and

transmission functions is an artificial separation. I could be wrong, so let me

ask the minister this: are any of the employees that are to be transferred to

Accenture currently working in generation stations?

Hon. R.

Neufeld: First, they're not being transferred. They have had a vote, and

they have elected to move over to Accenture Business Services. I can get some

further information for the member on that question. I'm not sure whether I can

say yes or no to that question right now, because there may be some places

around the province where some of those people may be working, and I'm not sure

about that. If the member will give me time — in fact, the gentleman that's

with me from B.C. Hydro is not sure either — we'll get that response for the

member.

MacPhail: They're not sure? How is it that I know there are employees in

generation stations being transferred, and the minister and his staff don't know

that?

Frankly,

I am completely taken aback. Are there employees in the distribution facilities

who are being transferred?

You're just

lying.

Point of Order

Hon. R.

Neufeld: On a point of order. I just heard the Leader of the Opposition say

I'm lying. I have tried to answer the questions as carefully and honestly as I

can. That member knows that I don't lie in this House. I was quick to withdraw

my remark the other day. I don't think we need that kind of behaviour in the

House. I don't need her calling me a liar or anyone else calling me a liar. I

would ask that she stand and withdraw that statement right now.

The

Chair: Member, I clearly heard you say the word. I would ask you to stand

and withdraw that, please.

MacPhail: I withdraw.

I'd be

happy for them to answer my questions. The most senior people are here. Just

answer the questions.

Debate Continued

Hon. R.

Neufeld: There are about 1,600 people that have elected to move to this new

business called Accenture Business Services. I can't tell you in this House

exactly where each one of those comes from. There could be some from generation;

there could be some from distribution, depending on the kind of work they're

doing.

MacPhail: Maybe the Chair could introduce the staff who are with him,

please.

Hon. R.

Neufeld: Yes, I am remiss in that. I appreciate the member reminding me. I

have with me Gary Sherlock, the director of finance at B.C. Hydro; and Chris

Trumpy, the special adviser to the minister — to me — behind me; and also

Les MacLaren, chief executive officer, Crown agencies secretariat, on my right.

[1550]

MacPhail: How is it that B.C. Hydro cannot answer these questions in this

House? How is it that B.C. Hydro does not have this information?

Hon. R.

Neufeld: Again, I will offer to provide that to the member at a later date.

As we speak, there will be people watching, and someone will get that

information to us.

MacPhail: Well, you know, there are only three of us in this Legislature who

are holding this government to account on this piece of legislation. It is our

only opportunity to discuss this legislation. We are talking about the heart of

the legislation right now. The minister is surrounded by and perhaps has

expertise himself, and he can't answer these basic questions.

Hundreds of

thousands of British Columbians believe the minister when he says that they're

not privatizing the core assets of B.C. Hydro, and there are hundreds of

thousands of others who question the minister on that. So there would be

hundreds of thousands of British Columbians who would think that the generation

stations operate all on their own and that because the government says it's not

privatizing the generation stations, even if they remove all the employees to

Accenture, the generation stations would operate on their own.

I'm just

trying to find out from the minister exactly what this support service is. He

couldn't answer what "from time to time" means, what a support service

from time to time is. He can't answer the question now about whether the

employees of the generation station are being privatized. The reason why he

doesn't want to answer those questions is because people would have to come to

the conclusion that the delineation of support services as distinct from the

core assets is artificial and means nothing to the reality of delivery of hydro

to British Columbians.

The

employees who work in those generation stations are being privatized, are being

moved to Accenture. The employees of the distribution systems are being

privatized, moved to Accenture. The employees of the transmission lines are

being privatized and moved to Accenture. This minister has to come to the

conclusion that the support services he is privatizing are key to the operation

of the core assets which he claims are not being privatized. Just because the

minister stands up every day and says core assets are not being privatized,

every British Columbian is supposed to believe him, when it is not so.

Let me ask

this question. The people who administer the systems for distribution,

transmission and generation — are they being moved to Accenture?

Hon. R.

Neufeld: Again, I offered that I would get the number of people that may be

providing some of

[ Page 5074 ]

the ancillary services and that may be working in a generation station, but

people that work in generation, distribution or transmission directly are not

being transferred. But I will get the number for you so that you can understand

what services they're providing and why they would be moving.

The member

tried to state that we were privatizing generation, transmission and

distribution. That is incorrect. We committed to not doing that, and we are not

doing that.

[1555]

MacPhail: The minister knows who isn't being transferred, but he doesn't

know who is being transferred. Hmm. Isn't that suspicious? Do any of the

employees who administer the systems for distribution, transmission and

generation…? Are any of those employees being transferred — those who

administer the systems that run transmission, generation and distribution?

Hon. R.

Neufeld: The operation groups in generation, distribution and transmission

stay with B.C. Hydro.

MacPhail: The operations group? Is that what I just heard? I'm sorry. And

could he define what the operations group is? Clearly, the government now, with

the staff, knows who's not being transferred. Funny how it is that they don't

know who is being transferred. Strange. Perhaps the minister could define what

an operations group is.

Hon. R.

Neufeld: The operation groups, which I said are the operating groups that

work in generation, distribution and transmission, are not being transferred.

What I said to the member earlier — and she doesn't want to listen — is that

in some of those generation facilities or maybe in distribution or transmission,

there could be some people that work now on other projects but happen to work

there. The core people that work on those core services are not being

transferred, but there could be some out of those operations that provide IT

services or something like that. I will get that information for the member.

MacPhail: I'm listening to every single word the minister says — every

single word. In what way will the employees that are being transferred from

generation, distribution and transmission interact with the operating group

that's staying behind?

Hon. R.

Neufeld: Again, as I said, there are people that are watching — people

that work in the generation line of business, the distribution line of business,

the transmission line of business — who stay with those groups. I called those

operating groups. There may be individuals that perform other services, who may

be working in those facilities but are not directly involved with those lines of

business, that may actually have elected to move.

MacPhail: Let me paint this scenario. The employees that are moving from

generation, transmission…. Well, let me do it individually — the employees

that are moving from the generation facilities. Can the generation facilities

operate on their own without those employees? Does the core asset…? Does the

generation keep going without those services that are moving to Accenture?

Interjection.

Hon. R.

Neufeld: Someone said it is simple, and it is simple, so I'll try it again.

Under

section 10 it says: "…does not include the production, generation,

storage, transmission, sale, delivery or provision of electricity." Again,

I will say no one that is in direct responsibility with generation, distribution

or transmission will have actually elected to move to Accenture Business

Services.

MacPhail: I'll repeat my question. The people that are being transferred,

unless the minister wants to lump all together…. That's fine — generation,

transmission and distribution. If those people go, what happens? Does generation

just carry on? Does transmission just carry on? Does distribution just carry on?

In other words, does the transfer of those employees have no effect at all on

generation, transmission and distribution? Is that what the minister is saying?

Hon. R.

Neufeld: Through the Chair to the member: I wasn't listening to her, and I'm

wondering if she'd ask that question again, please.

[1600]

MacPhail: It's the same question I asked before. Let me just assert this

because we know it to be true. There are employees that are being transferred

from the generation, transmission and distribution stations of B.C. Hydro.

They're being transferred to Accenture. They're being privatized. When those

employees have gone over to Accenture and if their work was not being done, does

the generation, transmission and distribution of hydro carry on in its entirety?

Hon. R.

Neufeld: The people that operate the generation, the people that operate the

distribution and the people that operate transmission are not going anywhere.

They will stay in B.C. Hydro operating those facilities. There may be some

people who work in those facilities that are doing other kinds of things, but

the people who actually operate the generation, transmission and distribution

are not moving.

MacPhail: Let me see how I can do this so the minister will actually answer

the question. The employees that are going to Accenture, who work for

generation, transmission and distribution, are what the minister calls support

services. Therefore, he's saying they're not core assets. Is that correct?

[ Page 5075 ]

Hon. R.

Neufeld: There could be people that work in those lines of business who are

not core to those lines of business, who have had the opportunity to move to

Accenture Business Services.

MacPhail: I think the minister is saying that the people who are being

privatized and working in those three areas are not core. Is that what the

minister's saying? The ones being transferred are not part of the core assets.

Is that right?

Hon. R.

Neufeld: Again, what I've said….

MacPhail: Yes, I know.

Hon. R.

Neufeld: The people that work in generation, distribution and transmission

who are core to those services — that's core services within B.C. Hydro —

are not going anywhere. They're going to continue to run the generation system.

They're going to continue to operate the transmission system. They're going to

continue to operate the distribution system.

But if

there are people that work in any one of these services that I listed earlier

— customer services, Westech, network computing services, financial services,

human resources, so on and so forth…. If they have a job where they're doing

some of those services in a number of different places across the province, they

may have elected to move to Accenture Business Services. As I understand, over

90 percent of them elected to do that.

MacPhail: I'm not sure why the minister keeps saying that 90 percent

elected…. No one's challenging that at all. We're challenging the government

on privatizing B.C. Hydro.

I have an

image. Maybe the minister can tell me I'm wrong. I have an image that all of the

people who now work in generation, transmission and distribution — the support

services — are being privatized. They're moving over to Accenture, or

Accenture will be their employer, because they're support services. I assume

then, because this government has made a commitment not to privatize those core

assets, that those core assets will run the same as they always have without the

services of those employees. Is that right?

[1605]

Hon. R.

Neufeld: Again, the people that operate those services within B.C. Hydro,

those core services, stay operating those services. They will continue to

operate those services under B.C. Hydro. If there is someone that provides an

ancillary service who works in that generating station, they may have elected to

transfer to Accenture Business Services, but the core assets of B.C. Hydro

remain core assets of B.C. Hydro.

MacPhail: We have cores within cores within cores now. Ooh, that's getting

to be a pretty small area that we're protecting from privatization.

Let me ask

this about those employees of generation, transmission and distribution that are

ancillary according to the minister's definition. Will they interact with the

employees that are left behind? If so, how? And I want details, please, Mr.

Chair — through you to the minister. I want specific examples of how those

people will interact with those that are part of the core of the core of the

core that aren't being privatized.

Hon. R.

Neufeld: I'm going to relay to the member once again that the core services

of B.C. Hydro are not sold. The core services — those being generation,

distribution and transmission — still remain as core services within the

company called B.C. Hydro. Those people that run and operate and work and

deliver those services as they relate to those three entities remain with B.C.

Hydro. There could be some services that are provided to generation,

distribution or transmission by some of the people that have moved to Accenture

Business Services.

Mr. Chair,

I think we should actually get back to the bill. I would rather debate the

legislation that we have in front of us than a deal that is outside of this.

MacPhail: We're actually trying to define support services, Mr. Chair. I

know that these questions make the minister uncomfortable, but we're debating

what support services are. The minister has said he's privatizing — or

outsourcing — support services. Yet it turns out that some of those support

services or ancillary services, which is exactly what we're debating in the

legislation….

I'm not

sure why the minister is uncomfortable about this. We're trying to find out

exactly where those support services are. What we've heard is — I can almost

say it from heart — that some of them work at the generation stations. Some of

them work in the transmission, and some of them work at the distribution

facilities, but they're apparently a little core within a core within a core. Oh

no, no, I'm sorry; those are the ones that aren't being privatized. They're

being privatized or outsourced.

[1610]

I'll sit

down, and I won't ask another question if the minister could just give me a yes

or no to this question. When those Accenture-ized support services are removed

from the chain of command inside Hydro, can the core assets, as the minister

defines them, of generation operate? Can transmission operate, and can

distribution operate without those services provided by the people inside those

operations who are being moved to Accenture? Yes or no?

Hon. R.

Neufeld: Again, as I mentioned, some of the people that will move to

Accenture Business Services provide services to those different generation,

distribution and transmission entities. I use an example of computers —

computerization. Someone who fixes computers at a generation station may be

there doing that kind of work, but that's not absolutely core to that business.

The operation of the business — generation,

[ Page 5076 ]

transmission and distribution…. The core people that operate those lines of

business will stay there.

MacPhail: God, I feel badly for the minister having to fall into these

traps. I'm wondering whether the minister has actually seen any of these

systems.

Let's just

talk about the core assets of the system. The core assets of the system deliver

power, so when power stops, that's a real problem. It's a huge problem. It means

the core assets aren't working. In hydro that's called a power outage. One of

the systems that's being privatized….

Interjections.

MacPhail: Well, it's true. I know. Some of the backbenchers are surprised at

the technical level of this discussion. I can well understand it, because the

minister himself doesn't get the technical nature of B.C. Hydro. I fully

understand the backbenchers being completely underwhelmed by the minister's

answers.

The

minister says: "Yeah, a computer system is…. Those who operate computer

systems are going over to Accenture, but that's got nothing to do with the core

assets." Well, the core assets are to deliver power. When there's a power

outage…. Maybe the minister can tell me what happens when there's a power

outage.

Hon. R.

Neufeld: I think this is getting a little ridiculous. I think the member

knows what happens when the power goes out, because her administration was in

the dark for ten years from 1991 to 2001. It's just unbelievable, the kind of

questioning that's coming from the member. A power outage is a power outage.

MacPhail: I don't know why the minister thinks these questions are

ridiculous. It's probably because he's made a commitment to resign if core

assets are privatized. We're just trying to figure out what part of the core

assets are being privatized.

In fact,

the core assets deliver power. When there's a power outage, the employees at

Westech go in and fix it. That's exactly what happens. They keep the power

going. It's a computer system that regulates this.

[1615]

Now, the

minister says: "It's people operating computers." They use computers

to operate the core system. How else does it happen? Part of the privatization

is these very employees who operate the computer.

Does this

Liberal government think it's people standing and pushing water over a dam? Is

that how they think the core assets work? Do they think it's little munchkins

that climb up transmission lines and push the power along? It's computer

operators who deliver the power through computer systems, and these are the very

people who are being privatized.

When I

asked the minister whether the system could operate without these employees who

are being privatized, he didn't answer the question. There's a very good reason

he didn't answer the question: the system goes down without these employees.

That's exactly what happens. It makes a mockery of this government's claim that

they're not privatizing core assets. It is absolutely ridiculous.

Interjections.

MacPhail: I can understand the Liberal back bench feeling extremely

uncomfortable with these questions, because it should have been them that asked

these questions in their secret caucus meetings, and they didn't do it. They

didn't do it at all. If they had asked it, they would have had to get the

minister to stop making the claim that they're not privatizing core assets.

That's exactly what it will be doing.

Well, this

probably should be easier. We now know that the core assets cannot operate

without the employees who are going to Accenture. We now know that. Let me ask

this question: even with those privatized employees keeping the system going,

how does B.C. Hydro get the information to actually charge customers for that

service?

Hon. R.

Neufeld: Obviously, the services that will be outsourced from Accenture

Business Services will be integral to the operation of B.C. Hydro. The core

assets are not changing at all, but B.C. Hydro will require services from those

divisions that actually will move to Accenture Business Services.

In response

to the last question: by meter.

MacPhail: How does the business community get the information about what

hydro they're using and how much to pay for it? We now know that the actual

delivery of power cannot be done without the services that are being privatized.

How does the government, through B.C. Hydro, get its money — get paid — for

the delivery of that publicly owned resource, B.C. water, without the services

of the people being privatized?

Hon. R.

Neufeld: No one is being privatized. The people will receive a bill from

British Columbia Hydro, as they have in the past. It will be exactly the same

kind of bill on that statement, and they will pay their bills exactly the way

they have in the past.

MacPhail: Well, actually, that's not true. That isn't true at all. Or is the

minister now saying that Accenture won't be providing the business and financial

support for distribution systems, generation and transmission?

[1620]

Hon. R.

Neufeld: The bills will still be generated by someone reading a meter. That

will go on the bill. The rate will be there. The end bill will be paid. It's

still from B.C. Hydro. To provide that, service will come from Accenture

Business Services, but the bills come from B.C. Hydro and the money goes to B.C.

Hydro.

MacPhail: I am so sorry. I am trying to figure out some words to say that

the minister either doesn't

[ Page 5077 ]

know his file or is not being forthcoming in a way that is actually dealing

with the real facts. Those services about determining how much hydro is used,

the financial delivery of the services to business, the checking of the accuracy

of those billings and the actual collection of the money are done by Accenture.

So the minister is somehow saying that it's B.C. Hydro doing these services. How

far have we come in this debate that he doesn't know how wrong he is?

Interjections.

MacPhail: Yes, he did. He said B.C. Hydro will be doing those services. That

is not accurate.

Interjections.

The

Chair: Order, please. Order. Let's have the question.

MacPhail: Let's give the minister a chance to correct the record. The

financial support, the delivery of the information to the businesses and the

customers about how much they have to pay, the collection of that money — who

does those services?

Hon. R.

Neufeld: B.C. Hydro will outsource those services to Accenture. The bill

will still be under B.C. Hydro's name. Accenture will provide those services to

B.C. Hydro.

MacPhail: Would B.C. Hydro get a nickel without Accenture?

Hon. R.

Neufeld: If there were no Accenture, B.C. Hydro would get a nickel because

they would be sending the bill out and getting the money.

MacPhail: I fully understand the stunned silence when I asked that question.

The minister knows full well that with Accenture there and the contract he has

signed with Accenture and the fact that Accenture is going to be a private

company…. Without all of those services, B.C. Hydro will not get a plug

nickel, not a plug nickel. The minister stands up and says that without

Accenture, B.C. Hydro will collect the money. Exactly. Exactly. The minister is

privatizing those services.

The core

assets can't operate without the privatized employees. No money can be collected

without those privatized employees. What exactly, in terms of the functioning of

B.C. Hydro in delivering power to businesses and consumers, will be left? What

actually will be able to take place without those employees?

[1625]

Hon. R.

Neufeld: I'll correct one thing. I don't, or the government doesn't, sign

any contract with Accenture Business Services. Actually, B.C. Hydro signs that

contract with Accenture Business Services. B.C. Hydro will receive services from

Accenture that will do numerous things for B.C. Hydro. If you want to say:

"If Accenture wasn't there…." If Accenture wasn't there — exactly

— B.C. Hydro would be sending the bills out themselves and collecting the

money themselves.

What

they're doing is outsourcing that to Accenture Business Services because in

their view, at the end of the day, they can get those services cheaper. Let's

remember there are about 6,000 employees with B.C. Hydro and about 1,600 that

have elected to transfer to Accenture Business Services. So there are a lot of

people still working for B.C. Hydro. The member tries to lead the House into

believing that everyone in B.C. Hydro will be moved over to Accenture Business

Services, and that is totally incorrect.

MacPhail: I don't know where the minister got that. I'm just talking about

the details of those moving to Accenture. I haven't mentioned the other

employees at all. I have no idea how big the management operation of B.C. Hydro

is. I'm just talking about the employees who are moving with Accenture. I'm just

asking about their duties. What we know is that the core assets can't operate

without the employees moving. We know there won't be a plug nickel collected

without those people.

Let me ask

this. This is kind of a detailed question, but it's just got to do with dam

control. I can fully understand if the minister thinks this is outrageous. The

control stations at both Burnaby Mountain and Vernon have employees that are

going to move with Accenture. They're going to be transferred — outsourced in

the minister's view, privatized in my view. The people who are moving control

the computer systems, and these computer systems control the flow of power. They

control the dam and the flow of power over the dam. Could the flow of water and

the generation of power occur without those employees that are now being

transferred?

Interjection.

The

Chair: Member, you should make your comments from your chair and not from

someone else's chair.

Hon. R.

Neufeld: The people that work in Vernon and Burnaby and that operate those

facilities stay within B.C. Hydro. The people who service that facility are the

ones that will actually be working for Accenture. The member is, in a way,

correct. Without those people that are going to be working for Accenture

Business Services…. They are important, integral to the whole system. We will

need them. That's why B.C. Hydro will contract back those services for those

people through Accenture Business Services. They have made the case that they

can do that cheaper and provide as good a level of service as they have in the

past — in fact, even better: save $250 million over a ten-year period. That's

$25 million a year. I think it's incumbent on the board of B.C. Hydro to look

carefully at all of

[ Page 5078 ]

those things to make sure they deliver the least-cost electricity they can to

the people in the province.

I, for the

life of me, can't figure out what's so bad about that. Actually, it amazes me

that the Leader of the Opposition is saying B.C. Hydro shouldn't save those kind

of dollars. In fact, it reminds me of what took place over the last ten years

under the leadership of the last administration. They didn't look at the savings

they could have — still provide the same services, still provide the same

level of services and actually try to provide better services, if that's

possible — and still provide…. The member knows full well that B.C. Hydro

has a responsibility by legislation to provide electricity to the province at

the cheapest rate possible, and that's exactly what we're trying to do and

what's taking place with this bill.

[1630]

MacPhail: The government has no evidence of the savings of the $250 million

over ten years — absolutely none, except their word. The contract itself now

cannot be examined by the B.C. Utilities Commission to justify whether those

savings are real or not. The government is just blowing smoke when they say

they're going to save $250 million over ten years. What is real are the

immediate, charged-right-now $60 million in costs to the ratepayer of

privatizing these services. That's a real cost. We know for sure that is

happening, and the savings are at best ephemeral. So far with this privatization

exercise, there aren't any savings. We're $60 million in the hole.

We have a

government that said they weren't going to privatize operations. We just had a

minister admitting that without those employees being privatized at the Vernon

control station and the Burnaby Mountain control station, they wouldn't operate.

Then he says B.C. Hydro is going to contract back those services. No, they're

not. I can't believe that the minister is saying that. They're turning those

services over to Accenture, who will be a private entity. Has he read the

memorandum of understanding? Has he read this? "B.C. Hydro and B.C.

subsidiary of Accenture will initially be involved in the new joint venture.

After a transition period, B.C. Hydro will relinquish its minority position in

the joint business. The new business will be privately owned and operate in the

private sector. It will be a wholly owned subsidiary of Accenture."

B.C. Hydro

isn't contracting back. Accenture owns the services provided by those employees,

and the minister just admitted that the Burnaby Mountain and the Vernon control

stations cannot operate without those employees. The minister stands up and says

they can't operate, and then he describes them sort of as a business. They

provide business services. Those employees at the Vernon control station and the

Burnaby Mountain station don't provide business services. They control the

computer systems that control the dams and the flow of water over those dams.

News flash for the Liberal backbenchers: that's the core service of B.C. Hydro

— a dam; water over it; electricity generated. That's the core service.

Hon. R.

Neufeld: Actually, the member's wrong in the way she interpreted what I

said. I did say that those people who work at Vernon and Burnaby Mountain will

still be B.C. Hydro employees that operate those systems. Some of the services

that are ancillary to that will come from Accenture Business Services. That's

exactly what's taking place.

The member

made reference to $60 million, which was in the service plan. Maybe I should

just read into the record what that $60 million comprises. There is $48 million

total in '02-03 — $44 million of that is related to Accenture, $35 million of

that $44 million is for post-retirement benefits for the employees, $5 million

of that is for severance for union employees that elect to sever, and $4 million

is for the administrative folks who are transferring. The other $4 million, from

$44 million to $48 million, is the Transco implementation that's going to take

place. The remaining $12 million will take place in relationship to Transco in

'03-04.

It's $60

million, but there are about $38 million or $35 million of those costs that have

to do with post-retirement benefits that are actually not cash, but they are a

responsibility of B.C. Hydro now. They have to do with B.C. Hydro's operations

anyhow. That maybe gives the member a bit of an idea where the $60 million comes

from.

Again, Mr.

Chair, if we could get back to the legislation, I would appreciate it very much.

I think we have strayed far enough away from it that we should get back to the

legislation that's before us.

The

Chair: Members, we're going to take a ten-minute recess before we proceed.

The

committee recessed from 4:35 p.m. to 4:48 p.m.

[H.

Long in the chair.]

section

2 (continued).

MacPhail: Mr. Chair, nice to see you. It's the first time you've been in the

chair in this session, so it's nice to see you.

We're

discussing the

section that talks about support services being allowed to be

designated in a way that I call privatization. The minister calls it

outsourcing. We're trying to distinguish how these support services, as defined

in the legislation…. I'm not quite sure what the minister thought we were

doing that was somehow off track from the legislation prior to that. We're

talking about exactly the legislation designating certain services, support

services, and being allowed to be outsourced and not subject to the scrutiny of

the B.C. Utilities Commission in the way it was before. Otherwise, there's no

reason for this legislation — absolutely no reason. We're trying to figure out

how support services differ from core services or core assets.

Let me ask

a couple more questions. I'm trying to figure out which services are just core

and can operate on their own without ancillary services or support ser-

[ Page 5079 ]

vices, because then that would be a real core service or a core asset. So far

we've been having a great deal of difficulty figuring out how anything could

operate without these services that are going to be privatized.

[1650]

Let me ask

this. Westech, which is now part of B.C. Hydro, is being privatized. When B.C.

Hydro was preparing for problems that arose or could have arisen out of the

changes resulting from Y2K…. Remember back to those days when the clock ticked

over to 2000? There was a huge, huge issue all across the world. When B.C. Hydro

was preparing for problems and had their game plan put in place and spent

millions of dollars on the preparation and the contingency plans for Y2K, they

designated Westech an essential service. I think in today's language, that would

be a core function. In other words, Hydro said: "We can't do this without

Westech." Now Westech is being Accenture-ized. I think we could agree on

that word — right? My definition of Accenture-ization is privatization, and

the minister's is outsourcing. What's so different today about these essential

services Westech provided in the year 2000 and the assessment B.C. Hydro has

done of them now?

Hon. R.

Neufeld: Obviously, at the time of the Y2K issue I believe everyone,

regardless of what company it was or what government it was, was very careful

about how they were dealing with their technology, because no one knew exactly

what would happen. The member may know better because she was there at the time,

but I would assume they classified it as an essential service to make sure there

would be no labour disruption or something to that effect — I'm not sure —

because of what was taking place at that particular time. There's no doubt about

it that IT services are important. In fact, in this deal B.C. Hydro will receive

those services from Accenture Business Services in the future.

MacPhail: Sorry, maybe I used the wrong word — "essential." It

had nothing to do with labour relations. Critical services are services that

could not be done without, in order to assure — guarantee — the continued

operation of B.C. Hydro. That's what B.C. Hydro designated Westech in the year

2000. The reason for that, again, is back to how B.C. Hydro operates, how B.C.

Hydro generates, transmits and distributes their one and only product: water for

electricity. That's through computerization.

[1655]

It's the

year 2003. We're into the twenty-first century. Computerization is where it's at

in terms of the efficiency of B.C. Hydro. B.C. Hydro does not operate at any

level, core or ancillary, without its computers. That's why Westech was

designated a core, critical, essential service. Again, it just puts the lie to

this artificial designation between support services and core assets. Without

the services that are being transferred to Accenture, the core assets do not

exist. It's a bunch of water, it's a bunch of concrete, and it's a bunch of

steel towers. That's it. Generation does not occur without those Accenture

employees. Transmission does not occur, and distribution does not occur. The

value of the core assets without those Accenture employees is zero, nothing —

absolutely nothing — and somehow this government says it's not privatizing

B.C. Hydro.

understand that, because this government places no value on public service —

absolutely none. They think, just the same way that they do in health care, that

you can contract out services all over the place, and it's got nothing to do

with the actual core service that's being delivered. The reality of it is that

if these Accenture employees stopped working, Hydro would shut down beginning to

end. You wouldn't have to put up a picket line to do that. Just withdrawing the

services that Accenture employees offer would shut down Hydro completely.

Well, let

me ask this question about Westech. Westech is the IT services of B.C. Hydro.

It's a fully — I think…. I'm not even sure if it's a subsidiary. It's

probably a subsidiary, but it's a wholly owned subsidiary of B.C. Hydro. The

employees of Westech who administer the core systems at Westech will be

transferred to Accenture. What level of decision-making goes with them in terms

of operating the computers that keep Hydro going?

Hon. R.

Neufeld: Policy and operations remain with B.C. Hydro.

I should

remind the member that the contract that B.C. Hydro and Accenture will enter

into at some time in the future is actually going to save B.C. Hydro some $250

million — $250 million — over ten years. That's $25 million a year on

average. I would say it is incumbent on the board of directors of B.C. Hydro to

look at every opportunity they can to save money, to spend money smarter — to

look to providing services at the same level as they are now or better and save

money at the same time — because obviously that money relates to a cost of

service that the ratepayers will have to pay at the end of the day.

I have

trouble. I can understand where the member's going and where she has been trying

to go all afternoon, but it all comes back to the fact that those same services

can be provided at maybe a better level — or at least the level they are now

— with a saving of $250 million for B.C. Hydro over ten years. I assume the

member is advocating that B.C. Hydro should be encouraged to lose $250 million

over the next ten years. I elect the first option. We should look at saving $250

million in a serious fashion.

[1700]

MacPhail: Wow, are we getting desperate in this chamber. The minister tries

to say that privatization…. I think his argument now is that privatization is

good because it saves money. No evidence. We know it's going to cost money, but

there's no evidence that it's actually going to save money. Is the minister now

admitting that he actually is privatizing? I think he is. He has been unable to

delink the privatization of the Accenture services from running the core assets.

Every single question we have raised that says the Accenture

[ Page 5080 ]

employees' services run the core assets, he has not been able to delink or

dissuade or challenge — not once. So we know.

Now the

minister is moving to the argument: "Well, yes, we're privatizing, but it

will save us $250 million." Absolutely no evidence of that. Absolutely none

except his word. We don't even know the terms of the contract. He's eventually

going to make it public.

We're now

on a whole different gamut here, aren't we? The truth is coming out — an

admission by omission that this is privatization of the core assets, an

admission that the core assets cannot operate without these services. It's all

in the name of some ephemeral amount of money that we have no idea is there or

not. We have no idea whatsoever. Talk about cooking the books. Talk about

somehow suggesting that this is good news because there's going to be money

saved, when there's no evidence of that whatsoever.

We know

that the core assets can't operate without Accenture services. We know that not

a plug nickel could flow to the corporation or the government without Accenture

services.

Let's

actually talk about the customer. Let's actually look at the customers'

services. What's the relationship between the customer and B.C. Hydro if

Accenture services aren't part of B.C. Hydro? Where does a customer go to B.C.

Hydro if they've got a complaint, let's say?

Hon. R.

Neufeld: I would encourage the member to get back on Bill 10, which we've

been debating all afternoon.

MacPhail: Let me ask my question again. The government is somehow suggesting

that support services have nothing to do with the operation of B.C. Hydro, which

is not being privatized. I would think that a customer and her relationship with

B.C. Hydro is pretty important. Without that customer, B.C. Hydro doesn't exist.

In fact, there are other options that a customer can choose. In terms of her

relationship via service, via complaint, via changing level of service, what

does the customer do directly with B.C. Hydro in the absence of the services

that have gone to Accenture? And if the minister doesn't understand how that's

part of the legislation, he should actually live up to his commitment to step

down.

[1705]

Penner: I've got a question for the minister in relation to some comments I

heard earlier about the potential savings under the Accenture agreement. I've

heard some members here say that savings are ephemeral, as if $250 million is

somehow not significant. I'm not surprised to hear that comment from the Leader

of the Opposition, a party that doubled the provincial debt and spent $450

million on fast ferries and other boondoggles.

I'm

interested in saving the ratepayers of B.C. Hydro money, but I'm also curious

about how we can get a further examination of the purported benefits of the

Accenture deal. I note that under sub (12) of

section 2, it's stated:

"Nothing in subsection 11(

e) precludes the commission" — and that's

the B.C. Utilities Commission — "from considering the costs incurred, or

to be incurred, in relation to an agreement designated under subsection

(9)…." That's the type of agreement we're dealing with here in terms of

the Accenture contract that's being talked about.

Can the

minister tell us how the BCUC might examine the cost impacts or revenue impacts

of the Accenture deal when B.C. Hydro goes before the Utilities Commission — I

think it's later this year — seeking an adjustment to the current tariff for

residential and industrial rates for electricity?

Hon. R.

Neufeld: In regard to how the BCUC will review the costs associated with the

Accenture deal, B.C. Hydro is going to apply for a rate review, I understand,

sometime this fall. When they go before the B.C. Utilities Commission, it will

be the first time in ten years that they've been before the B.C. Utilities

Commission to review costs associated with B.C. Hydro's services provided to

British Columbians. They will be able to review everything — every contract,

every dollar that B.C. Hydro spends — to make sure B.C. Hydro is actually

getting the best deal it possibly can for the ratepayers.

That also

means they will be able to request, I would assume, the contract between B.C.

Hydro and Accenture. They can review whether that contract, as it provides

services to B.C. Hydro, is actually doing what it says it's going to do and that

it is saving money for British Columbia Hydro over the long term — over the

ten-year period, $250 million.

What we're

doing is something that the last administration decided not to do for ten years.

That was to not allow B.C. Utilities Commission to review anything to do with

B.C. Hydro in relationship to costs. This will be the first time in ten years

that the B.C. Utilities Commission, a panel of experts, will actually review the

costs that are associated with generating electricity in British Columbia, which

will include all aspects and all contracts that B.C. Hydro has with all its

service providers.

Penner: Again, then, just to follow up with the minister. If it were to be

determined by B.C. Hydro or the B.C. Utilities Commission that the Accenture

agreement was not resulting in the benefits that are expected to B.C. Hydro but,

in fact, was detrimental to B.C. Hydro, what are the opportunities in the

agreement for ending the agreement? I heard the member for Maple Ridge–Mission

refer to the opportunity to get out of the contract and is looking for an exit

ramp. What exit ramps might exist in the Accenture agreement so that B.C. Hydro

can terminate the Accenture deal in the event that the Utilities Commission or

B.C. Hydro themselves find that the agreement is not working out as planned?

Hon. R.

Neufeld: In fact, those issues can be reviewed. There are and will be

benchmarks that have to

[ Page 5081 ]

be met in the contract to provide the same level of service or better

service. Actually, the B.C. Utilities Commission has the ability to say to

Hydro: "You can't pass those costs on to ratepayers. You have to go figure

out how you're going to actually provide that service as cheaply as you possibly

can." There will be other benchmarks and other utilities that they will

look at, I would assume, at the same time to make sure they are providing those

services at the least cost possible to the ratepayers. The B.C. Utilities

Commission has the ability to say: "No, you can't pass those on to the

ratepayers. Go figure out how you're going to do it differently."

[1710]

Penner: It would be my expectation, as with most commercial agreements or

other contracts, that if one party was not living up to their end of the

bargain, the other party to that agreement would be able to terminate the

agreement and perhaps even recover costs for breach of that agreement. Is that

the minister's understanding as well — that in the event Accenture does not

deliver the benefits they have promised under this contract, B.C. Hydro would be

able to terminate that contract and/or recover damages as a result of any breach

of that contract?

Hon. R.